UNITED STATES

 SECURITIES AND EXCHANGE
COMMISSION

 Washington, D.C. 20549

 FORM 10-K

 Annual report
pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934

 for the fiscal year ended
 July 31, 2025

 or

 Transition
report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934.

 Commission File Number:
 000-55863

 (Exact name of registrant
as specified in its charter)

 Delaware

 82-2296593

 (State or other jurisdiction of
 incorporation or organization)

 (I.R.S. Employer
 Identification No.)

 520 Broad Street, Newark,
 New Jersey 07102

 (Address of principal executive
offices, zip code)

 (212) 658-1450

 (Registrant's telephone
number, including area code)

 Securities registered pursuant
to Section 12(b) of the Act

 Title of each class

 Trading Symbol

 Name of each exchange on which registered

 Class B common stock, par value $0.01 per share

 RFL

 New York Stock Exchange

 Warrants to purchase Class B common stock

 RFL-W

 NYSE American

 Securities registered pursuant to section 12(g)
of the Act: None

 Indicate by check mark if the registrant is a well-known seasoned
issuer, as defined in Rule 405 of the Securities Act. Yes No

 Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act. Yes No

 Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes No

 Indicate by check mark whether the registrant has submitted electronically
every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No

 Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company.
See definitions of "large accelerated filer", "accelerated filer", "smaller reporting company", and
"emerging growth company" in Rule 12b-2 of the Exchange Act.

 Large accelerated filer

 Accelerated filer

 Non-accelerated filer
 Smaller reporting company

 Emerging growth company

 If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act.

 Indicate by check mark whether the registrant
has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial
reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or
issued its audit report.

 If securities are registered pursuant to Section
12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction
of an error to previously issued financial statements.

 Indicate by check mark whether any of those error
corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's
executive officers during the relevant recovery period pursuant to §240.10D-1(b).

 Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Act). Yes No

 The aggregate market value of the voting and
non-voting stock held by non-affiliates of the registrant, based on the adjusted closing price on January 31, 2025 (the last business
day of the registrant's most recently completed second fiscal quarter) of the Class B common stock of $2.03 per share, as reported
on the New York Stock Exchange, was approximately $ 38.6 million.

 The number of shares outstanding of the registrant's
common stock as of October 27, 2025 was:

 Class A common stock, par value $0.01 per share:

 787,163 shares

 Class B common stock, par value $0.01 per share:

 50,983,641 shares (excluding 101,487 treasury shares)

 DOCUMENTS INCORPORATED BY REFERENCE

 The definitive proxy statement relating to the
registrant's Annual Meeting of Stockholders, to be held January 8, 2026, is incorporated by reference into Part III of this Form
10-K to the extent described therein.

 Item 1.

 Business

 Item 1A.

 Risk Factors

 Item 1B.

 Unresolved Staff Comments

 Item 1C.

 Cybersecurity

 Item 2.

 Properties

 Item 3.

 Legal Proceedings

 Item 4.

 Mine Safety Disclosures

 Item 5.

 Market for Registrant's Common Equity,
 Related Stockholder Matters and Issuer Purchases of Equity Securities

 Item 6.

 [Reserved]

 Item 7A.

 Quantitative and Qualitative
 Disclosures about Market Risks

 Item 7.

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

 Item 8.

 Financial Statements and Supplementary
 Data

 Item 9.

 Changes in and Disagreements with Accountants
 on Accounting and Financial Disclosure

 Item 9A.

 Controls and Procedures

 Item 9B.

 Other Information

 Item 9C.

 Disclosure Regarding Foreign Jurisdictions
 that Prevent Inspections

 Item 10.

 Directors, Executive Officers and Corporate
 Governance

 Item 11.

 Executive Compensation

 Item 12.

 Security Ownership of Certain Beneficial
 Owners and Management and Related Stockholder Matters

 Item 13.

 Certain Relationships and Related Transactions,
 and Director Independence

 Item 14.

 Principal Accounting Fees and Services

 Item 15.

 Exhibits, Financial Statement Schedules

 Item 16.

 Form 10-K Summary

 SIGNATURES

 i

 This Annual Report contains forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements
that contain the words "believes," "anticipates," "expects," "plans," "intends"
and similar words and phrases. These forward-looking statements are subject to risks and uncertainties that could cause actual results
to differ materially from the results projected in any forward-looking statement. In addition to the factors specifically noted in the
forward-looking statements, other important factors, risks and uncertainties that could result in those differences include, but are
not limited to, those discussed under Item 1A to Part I "Risk Factors" in this Annual Report. The forward-looking statements
are made as of the date of this Annual Report, and we assume no obligation to update the forward-looking statements, or to update the
reasons why actual results could differ from those projected in the forward-looking statements. Investors should consult all of the information
set forth in this report and the other information set forth from time to time in our reports filed with the Securities and Exchange
Commission pursuant to the Securities Act of 1933 and the Securities Exchange Act of 1934, including our reports on Forms 10-Q and 8-K.

 Our business, operating results or financial
condition could be materially adversely affected by any of the following risks associated with any one of our businesses, as well as
the other risks highlighted elsewhere in this document. The trading price of our common stock could decline due to any of these risks.
Note that references to "our", "us", "we", "the Company", etc. used in each risk factor
below refers to the business about which such risk factor is provided.

 Our business is subject to numerous risks as
described in Item 1A. Risk Factors. Some of these risks include:

 We have
 limited resources and could find it difficult to raise additional capital.

 Our future success may depend on the results of the ongoing Phase 3 trial for Trappsol Cyclo. If we are unable to obtain regulatory approval or successfully commercialize Trappsol Cyclo or experience significant delays in doing so, our business will be materially harmed.

 Even if we were to obtain FDA approval for Trappsol Cyclo for treatment
 of the designated Rare Pediatric Disease NPC1, the Rare Pediatric Disease Priority Review Voucher Program may no longer be in effect
 or may have been revised at the time of any such approval, or we or they might not be able to capture the value of the Rare Pediatric
 Disease Priority Review Voucher Program even if the program is still in effect.

 Preclinical
 and clinical drug development is a lengthy and expensive process, with an uncertain outcome.
 Our and the Pharmaceutical Companies' preclinical and clinical programs may experience
 delays or may never advance, which would adversely affect the ability to obtain regulatory
 approvals for product candidates, or commercialize any product candidates for which regulatory approval is obtained, on
a timely basis or at all, which could have an adverse effect on our business.

 We and the Portfolio of Companies may expend our and their
limited resources to pursue a particular product candidate or an indication and fail to capitalize on product candidates or indications
that may be more profitable or for which there is a greater likelihood of success.

 We and the Pharmaceutical Companies are dependent upon
third parties for a variety of functions. These arrangements may not provide us with the benefits we expect.

 Results of preclinical studies and early clinical trials
may not be predictive of results of future preclinical studies or clinical trials.

 We and the Portfolio Companies face substantial
competition, and if competitors develop and market technologies or products more rapidly than those companies do or that are more effective,
safer or less expensive than the product candidates that those companies develop, our commercial opportunities will be negatively impacted.

 Rafael Medical Devices' device candidates may cause significant adverse events, toxicities or other undesirable side effects when used alone or in combination with other approved or cleared devices or investigational or approved drugs that may result in a safety profile that could prevent regulatory approval, prevent market acceptance, limit their commercial potential, result in significant negative consequences, or potential product liability claims.

 We rely significantly on information technology and any failure, inadequacy, interruption or security
 lapse of that technology, including any cyber security incidents, could harm our ability to operate our business and that of the
 Portfolio Companies effectively.

 We may not be able to consummate any investment, business combination, or other transaction.

 We are controlled by our principal stockholder, which limits the ability of other stockholders
 to affect the management of the Company.

 If we or the Portfolio Companies are unable to adequately maintain or protect our proprietary technology and product candidates and device candidates and services, if the scope of the patent protection obtained is not sufficiently broad, or if the terms of patents are insufficient to protect product candidates, device candidates, services or technologies for an adequate amount of time, competitors could develop and commercialize technology and products similar or identical to that technology or those product candidates, device candidates and services, and our ability to successfully commercialize technology or product candidates, device candidates or services may be materially impaired.

 As used in this Annual Report, unless the context
otherwise requires, the terms the "Company," "Rafael Holdings," "we," "us," and "our"
refer to Rafael Holdings, Inc., a Delaware corporation, and its subsidiaries, collectively. Each reference to a fiscal year in this Annual
Report refers to the fiscal year ending in the calendar year indicated (for example, fiscal 2025 refers to the fiscal year ended July
31, 2025).

 Item 1. Business.

 OVERVIEW

 Rafael Holdings, Inc. ("Rafael Holdings",
"Rafael", "we" or the "Company") is a biotechnology company that develops pharmaceuticals and holds
interests in clinical and early-stage companies that develop pharmaceuticals and medical devices. Our lead candidate is Trappsol
Cyclo, which is being evaluated in clinical trials for the potential treatment of Niemann-Pick Disease Type C1 ("NPC1"),
a rare, fatal and progressive genetic disorder. We also hold: (i) a majority equity interest in LipoMedix Pharmaceuticals Ltd. ("LipoMedix"),
a clinical stage pharmaceutical company; (ii) Barer Institute Inc. ("Barer"), a wholly-owned cancer research focused entity
whose operations have been substantially curtailed; (iii) a majority interest in Cornerstone Pharmaceuticals, Inc. ("Cornerstone"),
formerly known as Rafael Pharmaceuticals Inc., a cancer metabolism-based therapeutics company; (iv) a majority interest in Rafael Medical
Devices, LLC ("Rafael Medical Devices"), an orthopedic-focused medical device company developing instruments to advance minimally
invasive surgeries; and (v) a majority interest in Day Three Labs, Inc. ("Day Three"), a company which empowers third-party
manufacturers to reimagine their existing product offerings by utilizing Day Three's technology and innovation like Unlokt.
Our primary focus has been the continued development of Trappsol Cyclo through the completion of its ongoing pivotal Phase
3 clinical trial, the potential filing for regulatory approval and ultimately, if approved, commercialization of the product. We also
look to expand our investment portfolio through opportunistic and strategic investments including that address high unmet medical needs.
We continuously evaluate our other holdings to ensure the focus of our resources are on core assets and specifically the continued development
of Trappsol Cyclo.

 Historically, we owned real estate assets. As
of July 31, 2025, we hold a portion of a commercial building in Jerusalem, Israel as our sole remaining real estate asset.

 In May 2023, we first invested in Cyclo, a clinical-stage
biotechnology company that develops cyclodextrin-based products for the potential treatment of neurodegenerative diseases. Cyclo's
lead drug candidate is Trappsol Cyclo (hydroxypropyl beta cyclodextrin), a treatment for NPC1. NPC1 is a rare and fatal autosomal
recessive genetic disease resulting in disrupted cholesterol metabolism that impacts the brain, lungs, liver, spleen, and other organs.
In January 2017, the FDA granted Fast Track designation to Trappsol Cyclo for the treatment of NPC1. Initial patient enrollment
in the U.S. Phase I study commenced in September 2017 and in May 2020, Cyclo announced Top Line data indicating Trappsol Cyclo
was well tolerated in this study. Cyclo is currently conducting a Phase 3 Clinical Trial evaluating Trappsol Cyclo
in Pediatric and Adult Patients with Niemann-Pick Disease, Type C1. On March 25, 2025, we consummated the Merger with Cyclo whereby
Cyclo became a wholly-owned subsidiary of the Company. See Note 3 to our Consolidated Financial Statements for more information on the
Merger with Cyclo.

 LipoMedix is a clinical stage company based in Israel that is focused
on the development of a product candidate that holds the potential to be an innovative, safe, and effective cancer therapy based on liposome
delivery. As of July 31, 2025, our ownership interest in LipoMedix was approximately 95%. As needed, we provide debt or equity funding
to Lipomedix to support its development and clinical efforts. LipoMedix is currently exploring strategic options for its lead candidate,
including potential licensing opportunities, collaborations with industry partners, and investigator-initiated studies.

 In 2019, we established Barer, originally as a preclinical cancer metabolism
research operation, to focus on developing a pipeline of novel therapeutic compounds, including compounds designed to regulate cancer
metabolism with potentially broader application in other indications beyond cancer. Barer was comprised of scientists and academic advisors
that are experts in cancer metabolism, chemistry, and drug development. In addition to its own internal discovery efforts, Barer pursued
collaborative research agreements and in-licensing opportunities with leading scientists from top academic institutions. Barer's
majority owned subsidiary, Farber Partners, LLC ("Farber"), was formed around one such agreement with Princeton University's
Office of Technology Licensing ("Princeton") for technology from the laboratory of Dr. Joshua Rabinowitz, in the Department
of Chemistry, Princeton University, for an exclusive worldwide license to its SHMT (serine hydroxymethyltransferase) inhibitor program.
In November 2022, we resolved to curtail our early-stage development efforts, including pre-clinical research at Barer. Since then, we
have sought partners for Farber programs and has entered into a license agreement for one of its technologies that is in the pre-clinical
research stage with the Ludwig Institute of Cancer Research and has transferred majority ownership of another one of its technologies,
SHMT, to a new company, Forme Therapeutics, that is being managed by Dr. Joshua Rabinowitz with the goal of developing SHMT. Going forward,
we expect that Barer will primarily operate as an entity holding interest in these two cancer-focused opportunities.

 We own a 37.5% equity interest in RP Finance
LLC ("RP Finance"), which was, until March 13, 2024 (the date of the RP Finance Consolidation (as described in Note 6 to
the Consolidated Financial Statements)), accounted for under the equity method. RP Finance is an entity in which vehicles associated
with members of the family of Howard S. Jonas (Executive Chairman, Chief Executive Officer, President, Chairman of the Board, and controlling
stockholder of the Company), hold an aggregate 37.5% equity interest. RP Finance holds debt and equity investments in Cornerstone. In
October 2021, Cornerstone received negative results of its Avenger 500 Phase 3 study for Devimistat in pancreatic cancer as well as a
recommendation to stop its ARMADA 2000 Phase 3 study due to a determination that the trial would be unlikely to achieve its primary endpoint
(the "Data Events"). Due to the Data Events, RP Finance fully impaired its then debt and equity investments in Cornerstone.

 On March 13, 2024, Cornerstone consummated a restructuring of its outstanding
debt and equity interests (the "Cornerstone Restructuring"). As a result of the Cornerstone Restructuring, Rafael became a
67% owner of the issued and outstanding common stock of Cornerstone (the "Cornerstone Acquisition"), and Cornerstone became
a consolidated subsidiary of Rafael. See Note 6 to the Consolidated Financial Statements for additional information on the Cornerstone
Restructuring, Cornerstone Acquisition, and RP Finance Consolidation. The Company is currently reviewing Cornerstone's current efforts,
prospects and available resources to determine its optimal operational direction.

 In May 2021, we formed Rafael Medical Devices,
an orthopedic-focused medical device company developing instruments to advance minimally invasive surgeries. In August 2023, Rafael Medical
Devices sold an aggregate 31.6% equity interest to third parties for $925,000. In February 2025, we invested approximately $582,000 in
cash, and Rafael Medical Devices raised approximately $44,000 from third parties in exchange for Rafael Medical Devices' Class A Units.
We currently hold a 73% equity interest in Rafael Medical Devices. On December 11, 2024, Rafael Medical Devices received a substantial
equivalence determination for the VECTR System from the Food and Drug Administration ("FDA") in response to Rafael Medical
Devices' 510(k) premarket notification. The FDA's clearance of the VECTR System is for use in minimally invasive ligament
or fascia release surgeries, such as carpal tunnel release in the wrist and cubital tunnel release in the elbow. The VECTR System has
been classified into Class II and is subject to special controls (performance standards). Rafael Medical Devices' development of future
products will depend upon the success of the VECTR System and our Company's ability to identify attractive opportunities in the
marketplace.

 In April 2023, we first invested in Day Three, a company which empowers
third-party manufacturers to reimagine their existing product offerings enabling those third-party manufacturers to bring to market better,
cleaner, more precise and predictable versions of their products by utilizing Day Three's technology and innovation like Unlokt.
In January 2024, we entered into a series of transactions with Day Three and certain of its shareholders, acquiring a controlling interest
in Day Three and subsequently consolidating Day Three's results (the "Day Three Acquisition"). On March 14, 2025, Day Three
Labs Manufacturing, a majority owned subsidiary of Day Three, entered into an Asset Purchase Agreement and Licensing Agreement (the "DTLM
Sale Agreement"), pursuant to which they sold assets and licensed certain applications of their Unlokt technology used in
their cannabinoid ingredient manufacturing business. See Note 13 in the Notes to our Consolidated Financial Statements for additional
information.

 Financial information by segment is presented
in Note 22 in the Notes to our Consolidated Financial Statements in Item 8 of this Annual Report.

 Our headquarters are located at 520 Broad Street,
Newark, New Jersey 07102. The main telephone number at our headquarters is (212) 658-1450 and our corporate web site's home page
is www.rafaelholdings.com.

 We make available free of charge our Annual Report
on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to these reports, and all beneficial ownership
reports on Forms 3, 4 and 5 filed by directors, officers and beneficial owners of more than 10% of our equity through the investor relations
page of our website ( as soon as reasonably practicable after such material is electronically filed
with the Securities and Exchange Commission. Our website also contains information not incorporated into this Annual Report on Form 10-K
or our other filings with the Securities and Exchange Commission.

 BUSINESS DESCRIPTION

 We work to advance the pipeline development of
Trappsol Cyclo as our primary focus and as research and clinical results warrant, continued investment in our other Portfolio
Companies, including Cyclo, LipoMedix, Barer, Rafael Medical Devices, Cornerstone and Day Three. We also further seek to expand our portfolio
through opportunistic and strategic investments, including investments in therapeutics which address high unmet medical needs. Historically,
the Company owned real estate assets. Currently, the Company holds a portion of a commercial building in Jerusalem, Israel as its remaining
real estate asset.

 Portfolio Companies

 Overview

 We are a biotechnology company that develops pharmaceuticals and holds
interests in clinical and early-stage companies that develop pharmaceuticals and medical devices. Our lead candidate is Trappsol
Cyclo, which is being evaluated in clinical trials for the potential treatment of NPC1 a rare, fatal and progressive genetic disorder.
We also hold (i) a majority equity interest in LipoMedix, a clinical stage pharmaceutical company, (ii) Barer, a wholly-owned cancer research
focused entity whose operations have been substantially curtailed, (iii) a majority interest in Cornerstone, formerly known as Rafael
Pharmaceuticals Inc., a cancer metabolism-based therapeutics company, (iv) a majority interest in Rafael Medical Devices, an orthopedic-focused
medical device company developing instruments to advance minimally invasive surgeries, and (v) a majority interest in Day Three, a company
which empowers third-party manufacturers to reimagine their existing product offerings by utilizing Day Three's technology and innovation
like Unlokt. Our primary focus has been the continued development of Trappsol Cyclo through the completion of its ongoing
pivotal Phase 3 clinical trial, the potential filing for regulatory approval and ultimately, if approved, commercialization of the product.
We also look to expand our investment portfolio through opportunistic and strategic investments including that address high unmet medical
needs. We continuously evaluate our other holdings to ensure the focus of our resources are on core assets and specifically the continued
development of Trappsol Cyclo.

 Cyclo Therapeutics, LLC / Trappsol
Cyclo

 Cyclo Therapeutics, LLC (referred to as Cyclo)
is a clinical -stage wholly owned subsidiary that develops cyclodextrin-based products primarily for the potential treatment of diseases.

 Cyclo filed a Type II Drug Master File with the
United States (US) Food and Drug Administration ("FDA") in 2014 for Trappsol Cyclo (hydroxypropyl beta cyclodextrin)
as a treatment for Niemann-Pick Disease, Type C1 ("NPC1"). NPC1 is a rare and fatal autosomal recessive genetic disease resulting
in disrupted cholesterol metabolism that impacts the brain, lungs, liver, spleen, and other organs. In 2015, Cyclo launched an International
Clinical Program for Trappsol Cyclo as a potential treatment for NPC1. In 2016, Cyclo filed an Investigational New Drug application
("IND") with the FDA and was notified by the FDA that its study may proceed for its initial Phase I Protocol. In addition
to the ongoing clinical development program within the IND, Trappsol Cyclo has been granted Orphan Drug Designation (May
2010), Fast Track Designation (January 2017) and Rare Pediatric Disease Designation (December 2017) by the FDA. It is recognized that
a Pediatric Study Plan (PSP) is not required for non-oncology products with Orphan Drug status in the US, however, a Pediatric Investigational
Plan (PIP) has been agreed with the European Medicines Agency (EMA) for Trappsol Cyclo which includes clinical trials in
patients from birth to less than 18 years of age. Cyclo has also received Orphan Drug Designation in Europe (April 2015). If Trappsol
Cyclo were to be approved under an orphan-designated indication, it would provide Cyclo with the exclusive right to sell Trappsol
Cyclo for the treatment of NPC1 for seven years in the United States following FDA drug approval, and will provide 10 years of
market exclusivity in Europe following EMA regulatory approval. An additional 2 years of exclusivity in Europe could be added upon acceptance
by the EMA's Pediatric Committee of Cyclo's pediatric investigation plan (PIP) demonstrating that Trappsol Cyclo
addresses the pediatric population.

 On December 1, 2017, the FDA granted Cyclo's
request and designated hydroxypropyl-B-cyclodextrin (HPBCD) for treatment of Niemann-Pick disease type C (NPC) as a drug for a "rare
pediatric disease," as defined in section 529(a)(3) of the Federal Food, Drug and Cosmetic Act (FD&C Act) (21 U.S.C. 360ff(a)(3)).
Rare Pediatric Disease designation by FDA enables priority review voucher eligibility upon U.S. marketing approval of a designated drug
for a rare pediatric disease. The Rare Pediatric Disease Priority Review Voucher, or PRV, program is intended to encourage development
of therapies to prevent and treat rare pediatric diseases. The voucher, subject to meeting eligibility requirements and current statutory
deadlines, could be awarded to the sponsor of a designated rare pediatric disease product application in the event that its New Drug
Application ("NDA") or Biologics License Application ("BLA") receives FDA approval. Once received, the voucher could
be used by us, or sold or transferred to another entity and used by that new holder of the voucher, to receive priority review for a
future NDA submission, which generally can reduce the FDA review time of such future submission to six months.

 NPC is a devastating lysosomal storage disorder
which can occur in both the pediatric and adult population. Many children diagnosed with NPC die before their fifth birthday. This has
a significant public health impact in relation to the resources required to support the needs of patients and their families. The manifestation
of NPC is extremely varied, with some patients suffering from different severities of systemic effects such as hepatomegaly and other
organomegalies and/or neurological effects which have significant impact on quality of life and ability to thrive. Despite three approved
products treating various aspects of the disease, there still remains an unmet medical need and new therapies are urgently required.

 Trappsol Cyclo is an investigational
new drug designed to deliver a first-in-class propriety cyclodextrin formulation that is administered intravenously (IV) in order to
mobilize lysosomal cholesterol. Trappsol Cyclo is designed to directly impact the root cause of NPC1 by mobilizing cholesterol
from late-stage endosomes and lysosomes. The Trappsol Cyclo development program includes 5 studies: 1 completed Phase 1 study,
1 completed Phase 1/2 study, 1 ongoing Open Label Extension (OLE) study to the completed Phase 1 study, 1 ongoing Phase 3 study
and a sub-study (outside the US) under the Phase 3 study in accordance with the current PIP agreed with the EMA. The PIP covers patients
from birth to less than 18 years of age.

 In completed and ongoing studies, treatment of
NPC with IV Trappsol Cyclo has indicated engagement on central and peripheral neurologic symptoms associated with NPC. Furthermore,
biochemical markers of cholesterol mobilization indicate the potential to be able to ameliorate systemic disease. Subject to FDA's and
EMA's review of any future application for regulatory approval, Trappsol Cyclo treatment may be able to offer a significant
improvement to quality of life, life expectancy and unmet need of patients with NPC and it is believed that the observed neurological
and systemic benefits of IV Trappsol Cyclo treatment may be confirmed in the ongoing Phase 3 placebo-controlled, pivotal
study and in the open-label study in patients less than 3 years of age.

 Cyclo also continues to operate its legacy fine
chemical business, consisting of the sale of cyclodextrins and related products to the pharmaceutical, nutritional, and other industries,
primarily for use in diagnostics and specialty drugs.

 Cyclo's core business has transitioned
to a biotechnology company primarily focused on the development of cyclodextrin-based biopharmaceuticals for the potential treatment
of diseases.

 Global Phase 3 Clinical Study
(TransportNPC TM)

 A Phase 3 multicenter, double-blind, randomized,
placebo-controlled pivotal trial to evaluate the safety, tolerability, and efficacy of 2000 mg/kg of Trappsol Cyclo (administration
as a slow infusion over 6.5 hours every 2 weeks) and standard of care, or SOC, compared to placebo and SOC in patients with NPC. The
trial has been authorized in more than 30+ sites across 13 countries (Argentina, Australia, Brazil, Germany, Israel, Italy, Poland, Saudi
Arabia, Spain, Taiwan, Turkey, UK and US). It has fully enrolled 94 patients for a total study duration period of 4 years, inclusive
of a 2-year open-label extension, or OLE. The primary endpoint is mean change in 5D-NPC-CSS and 4D-NPC-CSS composite severity score,
with secondary endpoints of SCAFI, PAS following swallowing (via video fluorography), and Vineland-2. Enrollment of the planned
94 patients was completed in May 2024 and, as such, the interim analysis (planned to be conducted when all 94 patients have reached the
48 week timepoint) was conducted in June 2025.

 In June 2025, an unblinded interim analysis at
48-weeks was reviewed by an independent Data Monitoring Committee ("DMC") when all 94 patients completed the 48-week timepoint.
Upon the DMC review of those analyses, the DMC concluded Trappsol Cyclo to be well-tolerated and recommended continuing the
study for the full 96 weeks.

 This Phase 3 study also includes an open-label
sub-study which will include newborn patients to less than 3 years of age primarily for safety, but also to provide outcome data on global
severity and improvement in response to Trappsol Cyclo from both the investigator and patient/family perspective (CGI-S,
CGI-C, CaGI-S, CaGI-C, and CaGI-C24). As of May 2024, the study has fully enrolled 10 patients, and 2 patients discontinued after 48
weeks (caregiver decision). Provided below is a summary of the data from this sub-study:

 At baseline, sub-study patients
 had a mixture of very mild to severe disease based on the Clinical Global Impression –
 Severity (CGI-S) scale;

 7 of 9 patients who have reached
 48 weeks participation in the study had an outcome of stabilization or improvement in CGI-S,
 with three patients showing improvement, and two patients showing deterioration of their
 CGI-S score;

 Adverse Event (AE) profile appears
 to be consistent with prior findings from earlier studies, and from the larger Phase 3 TransportNPC
 study that is irrespective of age and disease severity;

 As of May 2025, there were 146 AEs,
 reported as mild (69%), moderate (29%), or severe (2%); and

 No SAEs were considered by the principal
 investigators as related to or possibly related to study drug.

 In summary, this open-label sub-study suggests
that long-term treatment with Trappsol Cyclo in patients with NPC is considered well tolerated, with treatment emergent adverse
events that are monitorable and manageable, and only hearing loss and acute infusion reactions continue to be identified as Adverse Events
of Special Interest (AESI). The benefit-risk of Trappsol Cyclo is considered to continue to be acceptable based upon a consistent
safety and tolerability profile across clinical studies and age groups, thus in Cyclo's view supporting the continued investigation of
Trappsol Cyclo in NPC.

 European and Israeli Phase I/II
Clinical Study

 A multicenter, Phase I/II, randomized, blinded,
parallel-group study has been conducted to compare the pharmacokinetics, or PK, of 3 different single IV doses of Trappsol Cyclo
in patients with NPC1 and to evaluate the efficacy and tolerability of the 3 different dosages of Trappsol Cyclo in patients
with NPC1 after 48 weeks of treatment. Patients received IV infusions of Trappsol Cyclo at doses of 1500 mg/kg, 2000 mg/kg,
or 2500 mg/kg body weight over 8–9 hours every 2 weeks for a 48-week period, with a follow-up evaluation 28 days after their
last study visit.

 A total of 12 patients were enrolled, randomized,
and received study treatment. Nine (9) of the 12 patients completed the study (2 of 5 patients in the 1500 mg/kg group; all 4 patients
in the 2000 mg/kg group; all 3 patients in the 2500 mg/kg group completed the study). Three patients, all in the 1500 mg/kg
group, discontinued the study for non-safety-related reasons.

 The objective of this study was to assess the
effectiveness of Trappsol Cyclo in the management of NPC by evaluation of the number of individual domains of the overall
score in which an improvement was observed over 48 weeks of treatment. Outcome measures included at least a 1-point reduction (improvement)
in 2 or more of the 17D-NPC-CSS domains and improvements in Caregiver Global Impressions – Severity (CGI-S) ratings. Provided below
is a summary of the data:

 8 of 9 completers (89%) met the
 1-point reduction in 2 or more of the 17D-NPC-CSS domains; one patient worsened overall using
 the 17D-NPC-CSS measure, and 8 patients met the primary measure.

 Of the 8 who met the 1-point reduction in 2 or more of the 17D-NPC-CSS domains,
 6 (75%) improved in at least one of the 5 domains judged by patients and their caregivers to be the most important
 for their quality of life (Ambulation, Fine Motor, Speech, Swallow and Cognition).

 7 of 9 (78%) showed improvements in Caregiver Global Impressions – Severity
 (CGI-S) ratings

 In summary, this study indicated that treatment
with Trappsol Cyclo crosses the blood brain barrier, showed improvements in neurological features of NPC, and was well-tolerated.

 US Phase 1 Clinical Study

 A Phase 1 study was conducted to evaluate the
single and multiple-dose pharmacokinetics of IV Trappsol Cyclo (HP CD) in patients with Niemann-Pick disease Type C (NPC1) and the
effects of dosing upon biomarkers of NPC disease.

 This study was a 14 week study assessing 2 dose
levels administered IV every 2 weeks:

 low-dose: 1500mg/kg

 high-dose: 2500mg/kg

 Endpoints included safety, pharmacokinetics (PK)
and pharmacodynamics (PD) of Trappsol Cyclo in peripheral tissues and the CNS in adult patients with NPC1. Specifically,
these parameters were assessed via serum, plasma and Cerebrospinal Fluid (CSF) biomarkers and liver assessments after 7 IV infusions
(14 weeks).

 In total, 13 subjects were enrolled and 10 completed
all study visits (6 patients at the 1500 mg/kg dose and 4 at the 2500 mg/kg dose completed the study) and 3 patients discontinued
for non-safety-related reasons. Overall, both dose groups were well-tolerated, with no significant laboratory findings and very few TEAEs
being reported in either dose group.

 The observed PK profile of Trappsol Cyclo
was similar following the first and seventh infusions, with a plasma half-life of 2 hours (h), a maximum plasma concentration reached
at 6 to 8 h, and no evidence of accumulation. Based on Cmax values systemic exposure was predicted to increase on average 1.2- to 1.5-fold
for a doubling in dose. The geometric mean clearance (76.9 – 112 mL/h/kg) was similar to the glomerular filtration rate. Trappsol
Cyclo was first detected in the CSF 4 h following the start of the infusion (first timepoint measured) for both dose groups.
The highest CSF concentrations measured were 48.3 g/mL (mean at 12 h, 33 M) for the 1500 mg/kg group and
37.8 g/mL (mean at 12 h, 25 M) for the 2500 mg/kg group. CSF samples were not collected after this time
point, precluding the ability to calculate a half-life (t1/2) for the drug in CSF. Trappsol Cyclo persisted in the CSF for
several hours after the IV infusion had ended.

 The PD effect of storage of unesterified cholesterol
in liver, the prime organ of cholesterol production and metabolism, was significantly increased at baseline and was down to normal levels
at 14 weeks of treatment, depending on dose, indicating a significant mobilization of lysosomal liver cholesterol over 14 weeks. Serum
levels of lathosterol, a marker of whole-body cholesterol synthesis, decreased transiently over several days of the first Trappsol
Cyclo infusion indicating increased availability of cholesterol to intracellular sites. The level of reduction post-infusion was
reduced after 7 treatment cycles in line with a normalization of hepatic cholesterol metabolism and storage. Serum levels of 4 -hydroxycholesterol,
a marker of cholesterol catabolism, increased significantly after the first infusion, a pattern that reduced after 7 treatment
cycles, again indicating a normalization of visceral cholesterol metabolism.

 24(S)-hydroxycholesterol (24(S)-HC) is a cholesterol
metabolite produced by neurons in the CNS. While cholesterol does not cross the blood brain barrier (BBB), 24(S)-HC is transported across
the BBB into the circulation and accounts for more than 50% of cholesterol export from the CNS. It increased significantly during the
week following the first infusion with Trappsol Cyclo, with a peak in the mean serum concentration at 128.02% of the baseline
value. This indicates increased availability of neuronal cholesterol for degradation in the neuronal endoplasmic reticulum (ER) in the
days post-treatment. Again, this effect was reduced at Week 13, indicating a reduction in lysosomal cholesterol storage in neurons. Importantly,
the quantity exported corresponds only to a few milligrams per treatment cycle, a minor fraction of cholesterol stored and mis-localized
in the brain of NPC patients. The magnitude of this effect can be interpreted as a sign of primary redistribution of cholesterol in the
CNS to cellular locations downstream of the E/L compartment, while only a small fraction is excreted as 24(S)-HC.

 Finally, the level of tau-protein, a marker indicating
neuro-inflammatory and neuro-degenerative processes in the brain showed a tendency to a post-treatment transient increase after the first
infusion and an overall reduction at the end of the study in 8 out of 10 patients.

 The results from the completed Phase I study
support the anticipated mechanism of action of systemically (IV) administered Trappsol Cyclo in mobilizing intracellular
cholesterol stores in the liver and the CNS in subjects with NPC1 as shown previously by nonclinical studies and was well-tolerated.

 An OLE study was open to patients in the US who
have completed the Phase I study and collects important longer term safety and efficacy data. All patients are currently receiving 1500
mg/kg Trappsol Cyclo in-home infusions every 2 weeks. Three patients remain on this study with the longest having reached
over 5 years of treatment. This study continues to be well-tolerated.

 LipoMedix

 LipoMedix is a clinical stage company, based in Israel, focused on
the development of a product candidate, Promitil, that holds the potential to be an innovative, safe, and effective cancer therapy
based on liposome delivery. As of July 31, 2025, the Company's ownership interest in LipoMedix was approximately 95%. As needed,
the Company provides funding to LipoMedix through intercompany promissory notes which are used to support research and development activities.
LipoMedix is currently exploring strategic options for the Promitil program, including potential licensing opportunities, collaborations
with industry partners, and investigator-initiated studies.

 About Promitil:

 LipoMedix was established to advance the pharmaceutical
and clinical development of a patented prodrug of mitomycin-C (MMC) and its efficient delivery in liposomes to cancer cells. This proprietary
molecule, known as Promitil – pegylated liposomal mitomycin-C lipidic prodrug (PL-MLP) – is designed with the goal of overcoming
the toxicity associated with the clinical use of mitomycin-C and turns it into a targeted, anticancer therapeutic that could potentially
become a treatment in a variety of cancers with high unmet need. The inventor and scientific founder, of LipoMedix is Alberto Gabizon,
M.D., Ph. D., of the Hebrew University – Shaare Zedek Medical Center, Israel. He is the co-inventor and co-developer of Doxil
(pegylated liposomal doxorubicin), a successful and widely used anticancer product based on a similar drug development strategy. Prof.
Gabizon is one of the few scientists intimately familiar with the successful development and commercialization process of liposomal drugs.

 Promitil is designed with the goal of providing
targeted delivery of MMC in a proprietary prodrug form. Based upon data available to date, Promitil appears to have the potential
to confer tumor targeting advantage due to the enhanced permeability and retention effect (EPR) of liposomes. Once in the tumor cells,
the prodrug is converted to the active drug (MMC) by thiolytic agents abundantly present in tumor tissues, and MMC induces DNA cross-linking
leading to tumor cell death. In preclinical studies, Promitil appeared to inhibit cancer cells growth in animal models (pancreatic,
colorectal, stomach, breast, ovarian, melanoma, bladder), including multidrug resistant tumors, as monotherapy as well as in combination
with radiotherapy and/or approved cancer drugs. In these early-stage, preclinical studies, Promitil appeared to be more efficacious
and less toxic than MMC by a 3-fold factor.

 LipoMedix has completed 4 clinical studies with
Promitil including:

 Phase
 1A, a dose escalation study of Promitil in patients with advanced cancers. (Golan T, Grenader
 T, Ohana P, Amitay Y, Shmeeda H, La-Beck NM, Tahover E, Berger R, Gabizon A. Pegylated liposomal
 mitomycin C prodrug enhances tolerance of mitomycin C: a phase 1 study in advanced solid
 tumor patients. Cancer Medicine. 2015;4(10):1472-83.)

 Phase
 IB in advanced colorectal cancer patients with Promitil as single agent and in combination
 with capecitabine and/or bevacizumab. (Gabizon A, Tahover E, Golan T, Geva R, Perets R, Amitay
 Y, Shmeeda H, Ohana P. Pharmacokinetics of mitomycin-c lipidic prodrug entrapped in liposomes
 and clinical correlations in metastatic colorectal cancer patients. Invest New Drugs. 2020;38(5):1411-1420.)

 Phase
 1B of Promitil-based chemo-radiotherapy in patients with advanced cancers. (Sapir E, Pffefer
 R, Wygoda M, Purim O, Levy A, Corn B, Amitay Y, Ohana P, Gabizon A. Pegylated Liposomal Mitomycin
 C Lipidic Prodrug in Combination with External Beam Radiation Therapy in Patients with Advanced
 Cancer: A Phase 1 Study. Int J Radiat Oncol. 2023; Volume 2023.)

 Phase
 2A of Promitil Treatment of Patients With Solid Tumors Associated With Deleterious Mutations
 Who Have Progressed After Therapy (CSR yet to be finalized)

 In these four clinical studies, over 140 patients
were treated with Promitil as a single agent or in combination with other anticancer drugs or radiotherapy under a United States
IND to assess the safety, PK profile, and preliminary efficacy, in addition to 40 patients who were treated under a compassionate use
program. Promitil was given by intravenous infusion once every 3 or 4 weeks and appeared to be well-tolerated at a dose up to 2
mg/kg. Except for mild myelosuppression, no other toxicities such as skin irritation, mouth ulcers, neuropathic pain, diarrhea, or hair
loss were reported in these studies. Promitil was stable in plasma with a half-life of approximately 20 hours (vs 40-50 minutes
for naked MMC).

 Next Steps:

 Homologous recombination (HR) is an evolutionarily
conserved process for repairing DNA double-strand breaks with high fidelity, and the BRCA1 and BRCA2 proteins are considered to play
essential roles in this process. Patients harboring germline mutations in the BRCA1 and/or BRCA2 genes have significantly increased lifetime
risk of developing breast, ovarian, pancreatic, and prostate cancer. Tumors with BRCA mutations are susceptible to platinum-based chemotherapy
and hypersensitive to agents that inhibit poly(ADP-ribose) polymerase (PARP). However, despite their initial anti-tumor activity, multiple
resistance mechanisms have been described, and the development of resistance limits the clinical utility of platinum-based and PARP inhibitor
(PARPi) therapies. Overall, treating cancers associated with deleterious germline mutations in HR genes, such as BRCA1, BRCA2, and PALB2,
remains a clinical challenge.

 Preclinical studies have suggested that mitomycin
C (MMC) was effective in killing BRCA2-mutant tumors. Preliminary indications of clinical efficacy of MMC have also been reported in
heavily pretreated ovarian cancer patients with BRCA1 mutations and in a patient with advanced, gemcitabine-resistant pancreatic cancer
harboring a PALB2 gene mutation. Pancreatic ductal adenocarcinoma (PDAC) continues to be one of the most lethal malignant neoplasms,
with a 5-year survival rate of only 5%. Surgery is the only potentially curative treatment; however, only about 20% of PDAC patients
are candidates for surgery at diagnosis, and recurrence is common, often accompanied by therapeutic resistance. Despite advances in systemic
combination chemotherapies, survival outcomes in PDAC remain poor.

 Based on the reported indications of preclinical
and clinical activity of MMC in BRCA-mutated tumors and data suggesting a potential favorable safety profile of Promitil in earlier
clinical studies, LipoMedix initiated a Phase IIa clinical trial to evaluate the safety and preliminary efficacy of Promitil in
patients with deleterious germline mutations in BRCA1, BRCA2, or PALB2. This study was conducted across six hospitals in Israel.

 While the treatment was generally well tolerated,
the study did not meet its efficacy endpoints. These results underscore the complexity of treating BRCA- and PALB2-mutated pancreatic
and other cancers, and highlight the need for continued research into novel therapeutic strategies for this challenging patient population.

 In light of these findings, LipoMedix is currently
exploring strategic options for the Promitil program, including potential licensing opportunities, collaborations with industry
partners, and investigator-initiated studies.

 Farber

 Farber, a majority owned subsidiary of Barer, was formed around an
agreement with Princeton University's Office of Technology Licensing for technology from the laboratory of Dr. Joshua Rabinowitz,
in the Department of Chemistry, Princeton University, for an exclusive worldwide license to its SHMT (serine hydroxymethyltransferase)
inhibitor program. In November 2022, we resolved to curtail our early-stage development efforts, including pre-clinical research
at Barer Institute. Since then, we have sought partners for Farber programs and has entered into a license agreement for one of its technologies
that is in the pre-clinical research stage with the Ludwig Institute of Cancer Research and has transferred majority ownership of another
one of its technologies, SHMT, to a new company, Forme Therapeutics, that is being managed by Dr. Joshua Rabinowitz with the goal of developing
SHMT. Going forward, we expect that Barer, through its Farber subsidiary, will primarily operate as an entity holding interest in these
cancer-focused opportunities.

 Cornerstone

 We own our interest in Cornerstone through a
90% equity ownership interest in, and consolidate, Pharma Holdings, LLC ("Pharma Holdings"). Pharma Holdings holds 50% of
the equity interests in, and consolidates, CS Pharma Holdings, LLC. We serve as the managing member of Pharma Holdings, and Pharma Holdings
serves as the managing member of CS Pharma, with broad authority to make all key decisions regarding their respective holdings. Based
on our ownership interest in Pharma Holdings, and Pharma Holdings' ownership interest in CS Pharma Holdings, we have an effective
45% equity ownership interest in CS Pharma Holdings, LLC.

 In March of 2024, Cornerstone completed a comprehensive
restructuring transaction including, the conversion of the debt under a line of credit agreement and the promissory note held by the
Company, the conversion and modification of other Cornerstone debt obligations, the extension of the Cornerstone debt held by RP Finance,
a reverse stock split, the conversion of all outstanding preferred stock of Cornerstone into common stock and the adoption of certain
governance measures. Subsequent to the restructuring the Company owns 67% of Cornerstone.

 Science and Preclinical:

 Cornerstone's lead development candidate
is CPI-613 (devimistat), a stable analog of normally transient, acylated catalytic intermediates of lipoate. The CPI-613 intermediates
are designed to disrupt mitochondrial function and thereby decrease the TCA cycle function; thus, CPI-613 (devimistat) misinforms
these tumor systems, triggering mitochondrial stress and turning off the cancer cell TCA cycle. CPI-613 is designed to broadly affect
tumor metabolism, including disrupting mitochondria and potentially intercalating in cancer cell membranes. The metabolic and mitochondrial
stress have been found to trigger apoptotic and necrotic cell death pathways in tumor cells (Zachar et al., J Mol Med, 2011, 89:1137-48;
Stuart et al., Cancer Metab. 2014, 2, 4: reviewed in Bingham et al., Expert Rev Clin Pharmacol. 2014, 7:837-46 and Hammoudi et al., Chin
J Cancer. 2011,;30:508-25). These data suggest that CPI-613 may hold the potential to have anti-cancer activity. Combining CPI-613
with generalized metabolic stressors like chemotherapy could hold the potential to result in the effective killing of even the most intractable
tumors like pancreatic cancer. These effects were observed in Cornerstone's Phase I/II trials to date (Alistar, et al., 2017; Pardee
et al., 2018). CPI-613 has been found to be selectively accumulated in tumors in animal studies. CPI-613 is a lipoic acid analog
with a fatty acid tail that may be able to utilize fatty acid transporters. Cancer cells have been shown to up-regulate fatty acid metabolism
to support tumorigenesis.

 Existing data suggests that there may be potential
advantages of CPI-613 (devimistat) over alternative anti-metabolism and anti-cancer drugs. CPI-613 is believed to be selectively
taken up by cancer cells. As a result, CPI-613 (devimistat) could hold the potential to be minimally toxic to healthy cells (i.e.,
potentially safe and well tolerated), potentially allowing extended treatment courses. Moreover, its emerging toxicity profile may allow
CPI-613 (devimistat) to be used in combination with other drugs and in older patients. These potential combination regimens include
established standards of care for major malignancies, possibly allowing potential treatment of surgically unresectable cancers. Additionally,
this potential toxicity profile could possibly support the administration of cocktails of anti-cancer drugs that may work synergistically
with CPI-613.

 Several pre-clinical pharmacology and toxicology
studies (including good laboratory practice toxicology (GLP Tox) studies) were conducted to investigate the pharmacokinetics (PK), drug
metabolism, safety, and anticancer activity of CPI-613 (devimistat). In pre-clinical in vitro and ex vivo studies, CPI-613
(devimistat) appeared to exhibit anticancer activities against tumor cell lines and cells. CPI-613 (devimistat) also appeared to
be taken up less in non-malignant cells. In vivo animal models bearing diverse tumor types were used to evaluate dose-response, PK, and
metabolism of CPI-613 (devimistat). In these early-state, pre-clinical studies, the drug was well tolerated in the animal models
studied. Prolonged survival was observed when compared to untreated controls in these animal models. GLP toxicology studies indicated
that any adverse events related to CPI-613 (devimistat) were considered transient and mostly observed during acute dosing; animals
returned to normal post-dose (i.e., toxicities appeared to be reversible or recoverable). Toxicokinetic (TK) exposures of Cmax (peak
concentration) and area under the curve (AUC) of CPI-613 (devimistat) from GLP Tox studies in rats and minipigs have suggested safety
margins expected to cover PK exposures of Cmax and AUC of CPI-613 (devimistat) in pancreatic cancer patients at doses studied.

 Clinical Highlights:

 Overall, one thousand thirty-three (1033) patients
have been exposed to CPI-613 (devimistat) throughout the various trials (25) in the proposed indications.

 Currently, one clinical trial is in the follow-up/close-out
phase in the following program:

 A Phase II Clinical Trial of CPI-613
 in Patients with Relapsed or Refractory Burkitt Lymphoma/Leukemia or high-grade B-cell lymphoma
 with rearrangements of MYC and BCL2 and/or BCL6.

 CPI-613 (devimistat) has been tested in
3 randomized controlled trials. Currently, Cornerstone is exploring strategic alternatives to further its clinical development.

 In March 2023, Cornerstone purchased all assets
and rights of telaglenastat (CB-839), a glutaminase inhibitor, from Calithera Biosciences, Inc. In February of 2025, Cornerstone sold
the rights to telaglenastat to Synhale for a modest upfront payment and potential future milestones based on development achievements.
Synhale plans to develop the drug candidate for patients with pulmonary hypertension.

 Rafael Medical Devices

 Rafael Medical Devices is a medical device company
currently concentrating on developing surgical and procedural devices designed to provide meaningful advantages to patients and healthcare
providers in the orthopedic market. Its current lead product is an orthopedic arthroscopy instrument for carpal and cubital tunnel syndrome.

 Rafael Medical Devices has assembled an in-house
team with expertise in engineering, device development quality control, and design who have been part of teams that have created successful
commercial medical devices in the past. It has begun to expand its expert network of experienced device creators, key opinion leaders.

 Orthopedics comprise a large addressable market.
Rafael Medical Devices is seeking to assemble a portfolio of Class I, II and III devices to mitigate risk across a portfolio of devices
with overlapping needs and markets. This strategy is designed to minimize supply chain requirements while maximizing market potential.

 On December 11, 2024, Rafael Medical Devices
received a substantial equivalence determination for the VECTR System from the FDA in response to Rafael Medical Devices' 510(k)
premarket notification. The FDA's clearance of the VECTR System is for use in minimally invasive ligament or fascia release surgeries,
such as carpal tunnel release in the wrist and cubital tunnel release in the elbow. The VECTR System has been classified as a Class II
device. Rafael Medical Devices has initiated a sales effort in the United States and building a network of distributors as it builds
out its commercial presence for the VECTR System. Rafael Medical Devices is actively expanding its manufacturing volume and engaging
with regional orthopedic distributors in the field of hand surgery.

 The Company has initiated design of its second
product, a follow on to the VECTR system that utilizes a retrograde release system. The development of future products will depend upon
the success of the VECTR System and the Company's ability to identify attractive opportunities in the marketplace.

 Day Three Labs

 Day Three Labs is a technology company focused
on creating solutions for increased bioavailability of other third-party manufacturers' products, with a specific focus on compounds
used as active ingredients in pharmaceutical and food supplement products. Day Three Labs' majority-owned subsidiary, Day Three
Labs Manufacturing, is dedicated to the commercialization of technology for the cannabis and hemp industries and has developed technological
solutions specifically engineered for increased bioavailability of cannabinoids. On March 14, 2025, Day Three Labs Manufacturing entered
into an Asset Purchase Agreement and Licensing Agreement (the "DTLM Sale Agreement"), pursuant to which Day Three Labs Manufacturing
sold certain assets and licensed certain applications of their Unlokt technology used in their cannabinoid ingredient manufacturing
business to a third party in exchange for a $500,000 convertible note in the acquiring company and milestone payments.

 OUR STRATEGY

 We are a biotechnology company that develops pharmaceuticals and holds
interests in clinical and early-stage Portfolio Companies, including our wholly-owned Cyclo, Barer and our majority interest in LipoMedix,
Rafael Medical Devices, Day Three and Cornerstone. Historically, our focus was on investing in and funding entities to discover and develop
novel cancer therapies. Our primary focus has been the continued development of Trappsol Cyclo through the completion of its
ongoing pivotal Phase 3 clinical trial, the potential filing for regulatory approval and ultimately, if approved, commercialization of
the product and to expand our investment portfolio through opportunistic and strategic investments, including in therapeutics that address
high unmet medical needs. We are currently evaluating our other holdings to ensure the future focus of our resources are on core assets
and specifically the Trappsol Cyclo clinical and development efforts.

 The focus of our efforts is subject to change
with market conditions, results of our internal development efforts, the availability of investment opportunities on acceptable terms,
the investment and acquisition opportunities we may pursue, and developments at those targets.

 Our goal within biopharma is to develop and bring
to market therapeutics which address high unmet medical needs, opportunistic investments, acquisitions and in-licensing of assets.

 We may selectively invest in pre-clinical and
clinical stage healthcare opportunities, including those in which we already own interests, when determined to be consistent with our
goals, and move toward clinical stage programs as research and development results warrant, while being ready to exploit other opportunities
that may arise.

 Our internal and external investment decisions
will be based on the progress and results of our clinical development and pre-clinical activities and other operational developments,
and the availability of targets for investment, acquisition or licensing.

 GOVERNMENT REGULATION AND COMPLIANCE

 Our operations, products, services, and potential
future customers and those of our Portfolio Companies are subject to extensive government regulation by the FDA and other federal and
state authorities in the United States, as well as comparable authorities in foreign jurisdictions. The global regulatory environment
is increasingly stringent, unpredictable, and complex. There is a global trend toward increased regulatory and enforcement activity related
to all medical products.

 In the U.S., our product candidates and device
candidates are regulated as either drugs or biological products under the Federal Food, Drug and Cosmetic Act, or FFDCA, and the Public
Health Service Act, or PHSA, and their implementing regulations, or as medical devices under the FFDCA and its implementing regulations,
each as amended and enforced by the FDA. These laws govern the processes by which our product candidates and device candidates would
be brought to market. The FDA has enacted extensive regulations that control all aspects of the development, design, performance, non-clinical
and clinical research, manufacturing, safety, efficacy, labeling, packaging, storage, installation, servicing, recordkeeping, premarket
clearance or approval, adverse event reporting, advertising, promotion, marketing and distribution, postmarket surveillance, and import
and export of drugs, biological products, and medical devices. In addition, the FDA controls the access of products to market through
processes designed to ensure that only products that are safe and effective for their intended use(s) and otherwise meet the applicable
requirements of the FFDCA and/or PHSA before they are made available to the public.

 Review And Approval Of Drugs In The United
States

 In the United States, the FDA approves and regulates
drugs under the FFDCA, and its implementing regulations. The failure to comply with requirements under the FFDCA and other applicable
laws at any time during the product development process, approval process or after approval may subject an applicant and/or sponsor to
a variety of administrative or judicial sanctions, including refusal by the FDA to approve pending applications, withdrawal of an approval,
imposition of a clinical hold, issuance of warning letters and other types of compliance letters, product recalls, product seizures,
total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement
of profits, or civil or criminal investigations and penalties brought by the FDA and the Department of Justice or other governmental
entities.

 Each of Cyclo, LipoMedix's, Barer's,
and Cornerstone's (collectively referred to as the "Pharmaceutical Companies") current product candidates must be approved
by the FDA through a New Drug Application, or NDA. An applicant seeking approval to market and distribute a new drug product in the United
States must typically undertake the following:

 completion of preclinical laboratory
 tests, animal studies and formulation studies in compliance with the FDA's good laboratory
 practice, or GLP, regulations;

 submission to the FDA of an Investigational
 New Drug, or IND, application, which must take effect before human clinical trials may begin;

 approval by an independent institutional
 review board, or IRB, representing each clinical site before each clinical trial may be initiated
 at each site;

 performance of adequate and well-controlled
 human clinical trials in accordance with good clinical practices, or GCP, requirements to
 establish the safety and efficacy of the proposed drug product for each proposed indication;

 submission of pediatric study plans
 and generation of data, unless inapplicable or otherwise deferred or waived, that are adequate
 to assess the safety and effectiveness of the drug candidate for the proposed indication(s)
 in all relevant pediatric subpopulations, and to support dosing and administration for each
 pediatric subpopulation for which the product is determined to be safe and effective;

 preparation and submission to the
 FDA of an NDA requesting marketing for one or more proposed indications;

 review by an FDA advisory committee,
 where appropriate if applicable;

 satisfactory completion of one or
 more FDA inspections of the manufacturing facility or facilities at which the product, or
 components thereof, are produced and packaged to assess compliance with current Good Manufacturing
 Practices, or cGMP, requirements and to assure that the facilities, methods and controls
 are adequate to preserve the product's identity, strength, quality and purity;

 satisfactory completion of FDA audits
 of clinical trial sites to assure compliance with GCP and the integrity of the clinical data;

 payment of user fees and securing
 FDA approval of the NDA; and

 compliance with any post-approval
 requirements, including the potential requirement to implement a Risk Evaluation and Mitigation
 Strategy, or REMS, and the potential requirement to conduct post-approval studies.

 Before an applicant begins testing a compound
with potential therapeutic value in humans, the drug candidate enters the preclinical testing stage. Preclinical studies include laboratory
evaluation of product chemistry, toxicity and formulation, and the purity and stability of the drug substance, as well as in vitro and
animal studies to assess the potential safety and activity of the drug for initial testing in humans and to establish a rationale for
therapeutic use. The conduct of the preclinical tests must comply with federal regulations and requirements including good laboratory
practices, or GLP, requirements. The sponsor must submit the results of the preclinical tests, together with manufacturing information,
analytical data, any available clinical data or literature and a proposed clinical protocol, to the FDA as part of the IND. An IND is
an exemption from the FFDCA that allows an unapproved drug to be shipped in interstate commerce for use in an investigational clinical
trial and a request for FDA authorization to administer an investigational drug to humans. Such authorization must be secured prior to
interstate shipment and administration of any new drug that is not the subject of an approved NDA. The IND automatically becomes effective
30 days after receipt by the FDA, unless the FDA places the clinical trial on a clinical hold within that 30-day time period. In such
a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin. The FDA may also impose
clinical holds on a drug candidate at any time before or during clinical trials due to safety concerns or non-compliance.

 A sponsor may choose, but is not required, to
conduct a foreign clinical study under an IND. When a foreign clinical study is conducted under an IND, all FDA IND requirements must
be met unless waived. When the foreign clinical study is not conducted under an IND, the sponsor must ensure that the study complies
with certain FDA regulatory requirements to use the study as support for an IND or subsequent application for regulatory approval. Such
studies must be conducted in accordance with GCP, including review and approval by an independent ethics committee, or IEC, and include
informed consent from subjects. The GCP requirements encompass both ethical and data integrity standards for clinical studies. The FDA's
regulations are intended to help ensure the protection of human subjects enrolled in non-IND foreign clinical studies, as well as the
quality and integrity of the resulting data. They further help ensure that non-IND foreign studies are conducted in a manner comparable
to that required for IND studies.

 Clinical trials involve the administration of
the investigational product to human subjects under the supervision of qualified investigators in accordance with GCP requirements, which
include, among other things, the requirement that all research subjects provide their informed consent in writing before their participation
in any clinical trial. Clinical trials are conducted under written study protocols detailing, among other things, the objectives of the
study, inclusion and exclusion criteria, the parameters to be used in monitoring safety, and the effectiveness criteria to be evaluated.
Each protocol must be submitted to the FDA as part of the IND before a clinical trial can begin in the US. In addition, an IRB representing
each study site participating in the clinical trial must review and approve the plan for any clinical trial before it commences at each
site, and the IRB must conduct continuing review and reapprove the study at least annually. The IRB must review and approve, among other
things, the study protocol and informed consent information to be provided to study subjects.

 Human clinical trials are typically conducted
in four sequential phases, which may overlap or be combined under certain limited circumstances when authorized in advance by FDA:

 Phase 1. The drug candidate is
initially introduced into a small number of healthy human subjects or, in certain indications such as cancer, patients with the target
disease or condition (e.g., cancer) and tested for safety, dosage tolerance, absorption, metabolism, distribution, excretion and, if
possible, to gain an early indication of its potential effectiveness and to determine optimal dosage.

 Phase 2. The drug candidate is
administered to a limited number of patients in the target patient population to identify possible adverse effects and safety risks,
to preliminarily evaluate the potential efficacy of the product for a specific targeted disease, and to determine dosage tolerance and
optimal dosage.

 Phase 3. These clinical trials
are commonly referred to as "pivotal" studies, which denotes a study or studies that present the pivotal data (but not the
only data) that the FDA or other relevant regulatory agency will use to determine whether or not to approve a drug candidate. The investigational
drug is administered to an expanded number of patients in the target patient population, generally at geographically dispersed clinical
trial sites, in well-controlled clinical trials to generate enough data to statistically evaluate the efficacy and safety of the product
for approval, to establish the overall risk-benefit profile of the product, and to provide adequate information for the labeling of the
product.

 Phase 4. Post-approval studies
may be required to be conducted, or a sponsor may decide on its own to conduct them, in order to collect additional data after initial
regulatory approval. These studies are used to gain additional experience and additional safety and/or efficacy data from the treatment
of patients in the approved therapeutic indication. Following review by FDA, data from Phase 4 studies can result in the suspension of
marketing and/or the withdrawal of approval of the drug for safety or effectiveness reasons.

 Progress reports detailing the results of all
clinical trials must be submitted at least annually to the FDA and more frequently if serious adverse events occur. In addition, IND
safety reports must be submitted to the FDA for any of the following: serious and unexpected suspected adverse reactions; findings from
other studies or animal or in vitro testing that suggest a significant risk in humans exposed to the drug; and any clinically important
increase in the case of a serious suspected adverse reaction over that listed in the investigator brochure.

 Concurrent with clinical trials, companies often
complete additional animal studies and must also develop additional information about the chemistry and physical characteristics of the
drug as well as finalize a process for manufacturing and packaging the product in commercial quantities in accordance with cGMP requirements.
The manufacturing process must be capable of consistently producing quality batches of the drug candidate and, among other things, the
sponsor must develop methods for testing the identity, strength, quality, purity, and potency of the final drug. Additionally, appropriate
packaging must be selected and tested, and stability studies must be conducted in the selected packaging to demonstrate that the drug
candidate does not undergo unacceptable deterioration in that packaging over its shelf life.

 If clinical trials are successful, the next step
in the drug development process is the preparation and submission to the FDA of an NDA or BLA, Biologics License Application, following
payment of applicable user fees, if any, under PDUFA, the Prescription Drug User Fee Act. The NDA or BLA is the vehicle through which
applicants formally propose that the FDA approve a new drug or biologic for marketing and sale in the United States for one or more indications.
The results of product development, preclinical studies, and clinical trials, along with detailed descriptions of the manufacturing process,
analytical tests conducted on the chemistry of the drug, proposed labeling, and other relevant information are submitted to the FDA as
part of an NDA or BLA requesting approval to market the product. The submission of an NDA or BLA is subject to the payment of substantial
user fees; a waiver of such fees may be obtained under certain limited circumstances. For example, products with orphan drug designation
are not subject to user fees.

 The FDA initially reviews all NDAs and BLAs submitted
to identify if there are any deficiencies before it can officially accept the applications for in-depth review, also known as "filing"
of the NDA or BLA. The FDA may request additional information before deciding whether to accept an NDA or BLA for filing, and the applicant
generally must submit the requested information before FDA proceeds. Subject to any additional information requests by FDA, this is generally
a 60-day filing period. Once the submission is accepted for filing, the FDA begins an in-depth review of the NDA or BLA.

 After the NDA or BLA submission is accepted for
filing, the FDA reviews the NDA or BLA to determine, among other things, whether the proposed product is safe and effective for its intended
use, whether the product is being manufactured in accordance with cGMP to assure and preserve the product's identity, strength,
quality, and purity, and whether the product has appropriate labeling for its proposed intended use. There generally is a two-tiered
system of review times – standard review and priority review – under the FDA's regulations and PDUFA performance goals
and procedures. A priority review designation means FDA's current PDUFA goal is to review and take action on 90% of such applications
within six months (compared to 10 months under standard review) in addition to the 60-day filing period. During the approval process,
the FDA also will determine whether a risk evaluation and mitigation strategy, or REMS, is necessary to assure the safe use of the drug
or biologic following its approval. If the FDA concludes that a REMS is needed, the sponsor of the NDA must submit a proposed REMS; the
FDA will not approve the NDA without a REMS, if a REMS is deemed to be required.

 Before approving an NDA or BLA, the FDA will
typically inspect the facilities at which the product is to be manufactured. These preapproval inspections may cover all facilities associated
with an NDA or BLA submission, including drug component manufacturing (e.g., active pharmaceutical ingredients), finished drug product
manufacturing, labeling and packaging operations, and control testing laboratories. The FDA will not approve an application unless it
determines that the manufacturing processes and all facilities are in compliance with cGMP requirements and adequate to assure consistent
production of the product within required specifications. Additionally, before approving an NDA or BLA, the FDA will typically inspect
one or more clinical trial sites to assure compliance with GCP.

 The FDA is required to refer an application for
a novel drug to an advisory committee or explain why such referral was not made. Typically, an advisory committee is a panel of independent
experts, including clinicians and other scientific experts, that reviews, evaluates and provides a recommendation as to whether the application
should be approved and under what conditions. The FDA is not bound by the recommendations of an advisory committee, but it considers
such recommendations carefully when making decisions about the approval of the drug.

 On the basis of the FDA's evaluation of
the NDA or BLA and accompanying information, including the results of the inspection of the manufacturing facilities and clinical trial
sites, the FDA may issue an approval letter or a complete response letter. An approval letter authorizes commercial marketing of the
product with specific prescribing information for a specific indication or indications in accordance with approved labeling. A complete
response letter generally outlines the deficiencies in the application and may require the sponsor to undertake substantial additional
testing or gather significant additional data and information in order for the FDA to reconsider the application. Historically, the text
of complete response letters generally was not released by the sponsor or FDA, and any disclosures associated with such complete response
letters was limited to a sponsor's determination of as to what portion of such letters were material or otherwise should be disclosed.
In June 2025, FDA adopted a policy of "radical transparency" and, after completing redactions for trade secrets and confidential
commercial information and personal private information, published more than 200 complete response letters that had been issued to sponsors
in response to applications submitted to FDA for approval of drugs or biological products between 2020 and 2024. In September 2025, FDA
released 89 additional, previously-unpublished complete response letters issued from 2024 to the present associated with pending or withdrawn
applications. The Agency also announced that, going forward, FDA would promptly release newly-issued complete response letters, and,
when approving applications, would release all complete response letters associated with that application, and that FDA also would publish
batches of previously-issued CRLs associated with withdrawn or abandoned applications. If a complete response letter is issued, the applicant
may either resubmit the application, addressing all of the deficiencies identified in the complete response letter, or withdraw the application.
If and when those deficiencies have been addressed to the FDA's satisfaction in a resubmission of the NDA or BLA, the FDA will
issue an approval letter. In its current PDUFA performance goals and procedures, the FDA has committed to reviewing and acting on 90%
of such resubmissions in two or six months depending on the type of information included and the FDA's classification of the resubmission.
Even with submission of this additional information, the FDA ultimately may decide that the application does not satisfy the regulatory
criteria for approval.

 If a product receives regulatory approval, the
approval may be limited to a specific disease(s) and dosage(s) or the indication(s) for use or other product labeling may otherwise be
limited, which could restrict the commercial value of the product. Further, the FDA may require that certain contraindications, warnings
or precautions be included in the product labeling. In addition, the FDA may require phase 4 testing, which involves post-approval clinical
trials designed to further assess a product's safety and/or effectiveness, and also may require testing and surveillance programs
to monitor the safety of approved products that have been commercialized.

 Fast track, breakthrough therapy, and priority
review designations

 The FDA is authorized to designate certain product
candidates for expedited review if they are intended to address an unmet medical need in the treatment of a serious or life-threatening
disease or condition. These programs are fast track designation, breakthrough therapy designation, and priority review designation. Receipt
of such a designation does not necessarily mean that a product candidate will receive an expedited approval.

 Accelerated approval pathway

 The FDA may grant accelerated approval to a product
for a serious or life-threatening condition that provides meaningful therapeutic advantage to patients over existing treatments based
upon a determination that the product has an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit. The
FDA may also grant accelerated approval for such a condition when the product has an effect on an intermediate clinical endpoint that
can be measured earlier than an effect on irreversible morbidity or mortality, or IMM, and that is reasonably likely to predict an effect
on IMM or other clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the availability or lack
of alternative treatments. Products granted accelerated approval must meet the same statutory standards for safety and effectiveness
as those granted non-accelerated approval. If post-marketing clinical studies fail to verify the anticipated clinical benefit, FDA may
withdraw approval.

 Post-Approval Requirements

 Any drug that receives FDA approval is subject
to continuing regulation by the FDA, including, among other things, requirements relating to recordkeeping, continued adherence to cGMP,
periodic reporting, product sampling and distribution, advertising and promotion, and reporting of adverse experiences with the product.
After approval, most changes to the approved product, such as adding new indications or other labeling claims, by submitting supplemental
NDAs, are subject to prior FDA review and approval. There also are continuing, annual user fee requirements for any marketed products
and the establishments at which such products are manufactured, as well as new application fees for supplemental applications containing
clinical data.

 In addition, drug manufacturers and other entities
involved in the manufacture and distribution of approved drugs are required to register their establishments with the FDA and state agencies,
and are subject to periodic unannounced inspections by the FDA and these state agencies for compliance with cGMP requirements. Changes
to the manufacturing process are strictly regulated and often require prior FDA review and approval before being implemented. FDA regulations
also require investigation and correction of any deviations from cGMP and impose reporting and documentation requirements upon the sponsor
and any third-party manufacturers, packagers or distributors that the sponsor may decide to use. Accordingly, manufacturers must continue
to expend time, money, and effort in the area of production and quality control to maintain cGMP compliance.

 Once an approval is granted, the FDA may withdraw
the approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches
the market. Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency,
or with manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved labeling
to add new safety information; imposition of post-market studies or clinical trials to assess new safety risks; or imposition of manufacturing
or distribution or other restrictions. Other potential consequences include, among other things:

 restrictions on the marketing or
 manufacturing of the product, shutdown of one or more manufacturing site, suspension of the
 approval, product recalls, or complete withdrawal of the product from the market;

 fines, warning letters or holds
 on post-approval clinical trials;

 refusal of the FDA to approve pending
 NDAs or BLAs or supplements to approved NDAs or BLAs, or suspension or revocation of product
 approvals;

 product seizure or detention, or
 refusal to permit the import or export of products; and/or

 injunctions or the imposition of
 civil or criminal penalties.

 The FDA strictly regulates the marketing, labeling,
advertising, and promotion of products that are placed on the market. Drugs may be promoted only for the approved indication(s) and in
accordance with the provisions of the approved labeling. The FDA and other agencies actively enforce the laws and regulations prohibiting
false or misleading promotion and the promotion of off-label uses, which require that promotion is truthful, not misleading, fairly balanced
and provides adequate directions for use, and that all claims are substantiated, and which also prohibit the promotion of products for
unapproved or "off-label" uses and impose other restrictions on labeling, in accordance with FDA guidance on off-label dissemination
of information and responding to unsolicited requests for information. A company that is found to have improperly promoted off-label
uses or engaged in any other false or misleading promotion may be subject to significant liability and enforcement actions.

 In addition, the distribution of prescription
pharmaceutical products is subject to the Prescription Drug Marketing Act, or PDMA, and its implementing regulations, as well as the
Drug Supply Chain Security Act, or DSCA, and its implementing regulations, which together regulate, among other things, the distribution
and tracking and tracing of prescription drugs and prescription drug samples at the federal level, and set minimum standards for the
regulation of drug distributors by the states. The PDMA, its implementing regulations, and state laws limit the distribution of prescription
pharmaceutical product samples, and the DSCA and its implementing regulations impose requirements to ensure accountability in distribution
and to identify, trace and remove counterfeit and other illegitimate or harmful drugs from the market.

 Abbreviated new drug applications for generic
drugs

 In 1984, with passage of the Hatch-Waxman Amendments
to the FFDCA, Congress established an abbreviated regulatory scheme authorizing the FDA to approve generic drugs that are shown to contain
the same active ingredients as, and to be bioequivalent to, drugs previously approved by the FDA pursuant to NDAs. To obtain approval
of a generic drug, an applicant must submit an abbreviated new drug application, or ANDA, to the agency. An ANDA is a comprehensive submission
that contains, among other things, data and information pertaining to the active pharmaceutical ingredient, bioequivalence, drug product
formulation, specifications, and stability of the generic drug, as well as analytical methods, manufacturing process validation data,
and quality control procedures. ANDAs are "abbreviated" because they generally do not include preclinical and clinical data
to demonstrate safety and effectiveness. Instead, in support of such applications, a generic manufacturer may rely on the FDA's
prior determination of safety and effectiveness based upon the preclinical and clinical testing previously conducted for a drug product
previously approved under an NDA, known as the reference-listed drug, or RLD.

 505(b)(2) NDAs

 As an alternative path to FDA approval for modifications
to formulations or uses of products previously approved by the FDA pursuant to an NDA, an applicant may submit an NDA under Section 505(b)(2)
of the FFDCA. Section 505(b)(2) was enacted as part of the Hatch-Waxman Amendments and permits the filing of an NDA where at least some
of the information required for approval comes from studies not conducted by, or for, the applicant. If the 505(b)(2) applicant can establish
that reliance on FDA's previous finding of safety and effectiveness of the RLD is scientifically and legally appropriate, it may
eliminate the need to conduct certain preclinical or clinical studies of the new product. The FDA may also require companies to perform
additional studies or measurements, including clinical trials, to support the change from the previously approved RLD. The FDA may then
approve the new product candidate for all, or some, of the label indication(s) for which the RLD has been approved, and/or for any new
indication(s) for which approval is sought by the 505(b)(2) applicant.

 Pediatric studies and exclusivity

 Under the Pediatric Research Equity Act, an NDA
or supplement thereto must contain data that are adequate to assess the safety and effectiveness of the drug candidate for the proposed
indication(s) in all relevant pediatric subpopulations, and to support dosing and administration for each pediatric subpopulation for
which the product is determined to be safe and effective. With enactment in 2012 of the Food and Drug Administration Safety and Innovation
Act, or FDASIA, sponsors must also submit pediatric study plans prior to the assessment data. Those plans must contain an outline of
the proposed pediatric study or studies the applicant plans to conduct, including study objectives and design, any deferral or waiver
requests, and any other information required by regulation. The applicant, the FDA, and the FDA's internal review committee must
then review the information submitted, consult with each other, and agree upon a final plan. The FDA or the applicant may request an
amendment to the plan at any time. The FDA may, on its own initiative or at the request of the applicant, grant deferrals for submission
of some or all pediatric data until after approval of the product for use in adults, or full or partial waivers from the pediatric data
requirements. Additional requirements and procedures relating to waiver requests, deferral requests and requests for extension of deferrals
are contained in FDASIA. Unless and until FDA promulgates a regulation stating otherwise, the pediatric data requirements generally do
not apply to products with orphan designation. However, in accordance with the FDA Reauthorization Act of 2017, or FDARA, certain orphan
designated cancer drugs are no longer exempt from having to conduct pediatric studies. FDARA requires that any original NDA or BLA submitted
on or after August 18, 2020, for a new active ingredient, must contain studies of molecularly targeted pediatric cancers, unless a deferral
or a waiver is granted, if the drug that is the subject of the application is intended for the treatment of an adult cancer and directed
at a molecular target that the FDA determines to be substantially relevant to the growth or progression of a pediatric cancer.

 Orphan drug designation and exclusivity

 Under the Orphan Drug Act, the FDA may designate
a drug product as an "orphan drug" if it is intended to treat a rare disease or condition, generally meaning that it affects
fewer than 200,000 individuals in the United States, or more in cases in which there is no reasonable expectation that the cost of developing
and making a drug product available in the United States for treatment of the disease or condition will be recovered from sales of the
product. A company must request orphan drug designation before submitting an NDA or BLA for the drug for the rare disease or condition.
If the request is granted, the FDA will disclose the identity of the therapeutic agent and its potential use(s). Orphan drug designation
does not shorten the PDUFA goal dates for the regulatory review and approval process, although it does convey certain advantages such
as tax benefits and exemption from the PDUFA application fee. The first applicant to obtain approval of an orphan drug is eligible for
seven years of exclusivity for a drug, or twelve years of exclusivity for a biologic, during which FDA may not approve the same drug
for the same approved orphan indication unless the subsequent product is shown to be clinically superior or if the FDA withdraws exclusive
approval or revokes orphan drug designation, or if the marketing application (NDA or BLA) for the orphan drug is withdrawn for any reason,
or if the holder of the orphan exclusive approval fails to assure a sufficient quantity of the orphan drug.

 Patent term restoration and extension

 A patent claiming a new drug product or its method
of use or its method of manufacturing may be eligible for a limited patent term extension, also known as patent term restoration, under
the Hatch-Waxman Act, which permits a patent restoration of up to five years for patent term lost during product development and the
FDA regulatory review process. Patent term extension is generally available only for drug products whose active ingredient has not previously
been approved by the FDA. The restoration period granted is typically one-half the time between the effective date of an IND and the
submission date of an NDA or BLA, plus the time between the submission date of an NDA or BLA and the ultimate approval date, up to a
maximum of five years. Patent term extension cannot be used to extend the remaining term of a patent past a total of 14 years from the
product's approval date. Only one patent applicable to an approved drug product is eligible for the extension, and the application
for the extension must be submitted prior to the expiration of the patent in question. A patent that covers multiple drugs for which
approval is sought can only be extended in connection with one of the approvals. The United States Patent and Trademark Office, or PTO,
reviews and approves the application for any patent term extension in consultation with the FDA upon PTO's determination that the
requirements for an extension have been met.

 FDA approval and regulation of companion diagnostics

 If safe and effective
use of a therapeutic depends on a diagnostic, a medical device that is often an in vitro diagnostic
or IVD, then the FDA generally will require approval or clearance of that diagnostic, known as a companion diagnostic, at the same time
that the FDA approves the therapeutic product. In August 2014, the FDA issued final guidance clarifying the requirements that will apply
to approval of therapeutic products and in vitro companion diagnostics. According to the guidance,
for novel drugs, a candidate IVD companion diagnostic and its corresponding therapeutic should be co-developed and approved or cleared
contemporaneously by the FDA for the use indicated in the therapeutic product's labeling. In July 2016, the FDA issued a draft
guidance detailing general principles to guide co-development of an in vitro companion diagnostic device with a therapeutic product.
In April 2020, the FDA issued final guidance intended to facilitate class labeling on diagnostic tests for oncology therapeutic products,
where scientifically appropriate.

 FDA's Rare Pediatric Disease Designation
and Priority Review Voucher Program

 Section 529 of the FFDCA grants the FDA authority
to award priority review vouchers, or PRVs, to sponsors of certain rare pediatric disease product applications that meet the criteria
specified in section 529. Under its Rare Pediatric Disease Priority Review Voucher program, a PRV may be awarded only for an approved
rare pediatric disease product application for a product that treats or prevents a "rare pediatric disease." A rare pediatric
disease product application is an NDA or BLA for a product that treats or prevents a serious or life-threatening disease in which the
serious or life-threatening manifestations primarily affect individuals aged from birth to 18 years; in general, the disease must affect
fewer than 200,000 such individuals in the U.S.; the NDA or BLA must be deemed eligible for priority review; the NDA or BLA must not
seek approval for a different adult indication (i.e., for a different disease/condition); the product must not contain an active ingredient
that has been previously approved by the FDA in any other application; and the NDA or BLA must rely on clinical data derived from studies
examining a pediatric population such that the approved product can be adequately labeled for the pediatric population. Before NDA or
BLA approval, the FDA may designate a product in development as a product for a rare pediatric disease, and, after December 20, 2024,
such designation is required to receive a PRV. To receive a rare pediatric disease PRV, a sponsor must, among other requirements, notify
the FDA, upon submission of the NDA or BLA, of its intent to request a voucher. If the FDA determines that the NDA or BLA is a rare pediatric
disease product application and grants priority review, and if the NDA is approved, the FDA will award the sponsor of the NDA or BLA
a PRV upon approval of the application. The FDA may revoke any PRV if the rare pediatric disease drug for which the voucher was awarded
is not marketed in the U.S. within 1 year following the date of approval.

 If a PRV is received, it can used by the Company
and is transferable to another sponsor and can be redeemed to receive a priority review of a subsequent marketing application for a different
product, and it is not limited to drugs for rare pediatric diseases. Once a PRV is issued, it may be sold or transferred an unlimited
number of times as long as the sponsor making the transfer has not yet submitted the application. The PRV entitles the holder of the
PRV to priority review of the accompanying NDA or BLA. The sponsor submitting the PRV must notify the FDA of its intent to submit the
voucher with the NDA or BLA at least 90 days prior to submission of the NDA or BLA and must pay a priority review user fee in addition
to any other required user fee. The FDA generally has a goal to take action on an NDA or BLA under priority review within the applicable
six month window after an NDA or BLA submission. However, neither a rare pediatric disease designation nor a PRV changes the standards
for approval, may not ultimately expedite the development or approval process for a product candidate that has received designation or
to which a PRV is applied, and it does not assure ultimate approval by the FDA. Further, there may be changes to the regulatory scheme
surrounding these designations, which render them obsolete.

 The FDA's Rare Pediatric Disease Priority
Review Voucher program began to sunset on December 20, 2024, due to the U.S. Congress' failure to pass a continuing resolution
or other legislation that reauthorized the program or otherwise extended it. Under the current statutory sunset provisions, after December
20, 2024, the FDA may award a PRV for an approved rare pediatric disease product application only if the sponsor already had secured
rare pediatric disease designation for the product candidate and only if that designation had been granted by December 20, 2024. Moreover,
under the current sunset provisions, after September 30, 2026, the FDA may not award any rare pediatric disease PRVs unless the program
is extended. In other words, even if a product candidate has received rare pediatric disease designation, if the NDA for that product
candidate is not approved by the FDA by September 30, 2026, no PRV will be awarded under the current sunset provisions even if all of
the other requirements for a PRV had been met. Although legislation to reauthorize and extend the rare pediatric disease priority review
voucher program has been proposed, the U.S. Congress has not yet, and may never, pass a bill to reauthorize the program, extend the sunset
dates, or otherwise amend the current statutory provisions governing the awarding of PRVs after September 30, 2026. Consequently, the
future of the program and its potential applicability to our product candidates remain unknown at this time.

 Review And Approval, Clearance Or Marketing
Authorization Of Medical Devices In The United States

 Unless an exemption applies, each medical device
commercially distributed in the United States requires either FDA clearance of a Premarket Notification, or 510(k), FDA approval of a
Premarket Approval, or PMA, application, or FDA marketing authorization in response to a De Novo request. Under the FFDCA, medical devices
are classified into one of three classes – Class I, Class II or Class III – depending on the degree of risk associated with
each medical device and the extent of manufacturer and regulatory control needed to ensure the device's safety and effectiveness.
Devices deemed by the FDA to pose the greatest risks, such as life sustaining, life supporting or some implantable devices, or devices
that have a new intended use, or that use advanced technology which is not substantially equivalent to that of a legally marketed device,
are generally placed into Class III.

 While most Class I devices are exempt from the
510(k) premarket notification requirement, manufacturers of most Class II devices are required to submit to the FDA a premarket notification
under Section 510(k) of the FFDCA requesting permission to commercially distribute the proposed device. The FDA's permission to
commercially distribute a device subject to a 510(k) premarket notification is generally known as 510(k) clearance. Class III devices
require approval of a PMA evidencing safety and effectiveness of the device. Certain novel devices of low to moderate risk, for which
the FDA can make a risk-based classification of the device into Class I or II, can receive marketing authorization in response to a De
Novo request.

 To obtain 510(k)
clearance, a manufacturer must pay the appropriate device user fee, unless eligible for a waiver or exemption, and submit a 510(k) premarket
notification demonstrating to the FDA's satisfaction that the proposed device is at least as safe and effective as, that is, "substantially
equivalent" to, another legally marketed device that itself does not require PMA approval, or a predicate device. A predicate device
is a legally marketed device that is not subject to premarket approval, i.e., a device that
was legally marketed prior to May 28, 1976 (pre-amendment device) and for which a PMA is not required, a device that has been reclassified
from Class III to Class II or I, or a device that was found substantially equivalent through the 510(k) process. The sponsor must submit
data and information that supports its substantial equivalency claims. The FDA's 510(k) clearance process usually takes from three
to twelve months, but often takes longer. FDA may require additional information, including clinical data, to make a determination regarding
substantial equivalence. In addition, the FDA collects user fees for certain medical device submissions and annual fees for medical device
establishments.

 Before the sponsor can market a proposed device
that is the subject of a 510(k) premarket notification, the sponsor must receive an order from the FDA finding substantial equivalence
and clearing the new device for commercial distribution in the US. If the FDA agrees that the device is substantially equivalent to a
lawfully marketed predicate device, it will grant 510(k) clearance to authorize the device for commercialization. If the FDA determines
that the device is "not substantially equivalent," the device is automatically designated as a Class III device. The device
sponsor then must either fulfill the more rigorous PMA requirements, or the sponsor can submit a De Novo request seeking a risk-based
classification determination for the device in accordance with the FDA's De Novo classification process, which is a route to market
for novel medical devices that are low to moderate risk and are not substantially equivalent to a predicate device. A sponsor also can
submit a De Novo classification request directly, without first submitting a 510(k), if the sponsor determines that there is no legally
marketed predicate device upon which to base a determination of substantial equivalence.

 After a device receives 510(k) clearance, any
modification that could significantly affect its safety or effectiveness, or that would constitute a major change or modification in
its intended use, will require a new 510(k) clearance or, depending on the modification, PMA approval or De Novo classification. The
FDA requires each manufacturer to determine in the first instance whether the proposed change requires submission of a 510(k), a De Novo
classification request or a PMA, but the FDA can review any such decision and disagree with a sponsor's determination. If the FDA
disagrees with a manufacturer's determination not to seek a new 510(k) or other form of marketing authorization for a modification
to a 510(k)-cleared product, the FDA can require the manufacturer to cease marketing and/or request the recall of the modified device
until 510(k) clearance or PMA approval is obtained or a De Novo classification is granted.

 The PMA process is more demanding than either
the 510(k) premarket notification process or the De Novo classification process and includes stringent clinical investigation and other
requirements. In a PMA, the manufacturer must demonstrate that the device is safe and effective, and the PMA must be supported by extensive
data, including data from preclinical studies and human clinical trials. All clinical investigations of devices to determine safety and
effectiveness must be conducted in accordance with the FDA's investigational device exemption, or IDE, regulations, which govern
investigational device labeling, prohibit promotion of investigational devices, and specify an array of recordkeeping, reporting, and
monitoring responsibilities of study sponsors and study investigators. If the device presents a "significant risk" to human
health, as defined by the FDA, the FDA requires the device sponsor to submit an IDE application to the FDA, which must become effective
prior to commencing human clinical trials. A significant risk device is one that presents a potential for serious risk to the health,
safety or welfare of a patient and either is implanted, used in supporting or sustaining human life, substantially important in diagnosing,
curing, mitigating or treating disease or otherwise preventing impairment of human health, or otherwise presents a potential for serious
risk to a subject. In addition, the study must be approved in advance by, and conducted under the oversight of, an Institutional Review
Board, or IRB, for each clinical site. The IRB is responsible for the initial and continuing review of the IDE, and the IRB may impose
additional requirements for the conduct of the clinical trial. If the device presents a non-significant risk to the patient, a sponsor
may begin the clinical trial after obtaining approval for the trial by one or more IRBs without separate authorization from FDA, but
must still follow abbreviated IDE requirements, such as monitoring the investigation, ensuring that the investigators obtain informed
consent, and adhering to labeling and recordkeeping requirements.

 In addition to clinical and preclinical data,
the PMA must contain a full description of the device and its components, a full description of the methods, facilities, and controls
used for manufacturing, and proposed labeling. Following receipt of a PMA, the FDA determines whether the application is sufficiently
complete to permit a substantive review. If FDA accepts the PMA for review, FDA has 180 days under the FFDCA to complete its review of
a PMA, although in practice, the FDA's review often takes significantly longer, and can take up to several years. An advisory panel
of experts from outside the FDA may be convened to review and evaluate the application and provide recommendations to the FDA as to the
approvability of the device. The FDA may or may not accept the panel's recommendation. In addition, the FDA generally will conduct
a pre-approval inspection of the applicant and/or its third-party manufacturers' or suppliers' facilities to ensure compliance
with the FDA's Quality System Regulation codified in 21 CFR Part 820, or QSR.

 The FDA will approve the new device for commercial
distribution if the FDA determines that the data and information in the PMA constitute valid scientific evidence and that there is reasonable
assurance that the device is safe and effective for its intended use(s). The FDA may approve a PMA with post-approval conditions intended
to ensure the safety and effectiveness of the device, including, among other things, restrictions on labeling, promotion, sale and distribution,
and collection of long-term follow-up data from patients in the clinical study that supported PMA approval or requirements to conduct
additional clinical studies post-approval. The FDA may condition PMA approval on some form of post-market surveillance when deemed necessary
to protect the public health or to provide additional safety and efficacy data for the device in a larger population or for a longer
period of use. In such cases, the manufacturer might be required to follow certain patient groups for a number of years and to make periodic
reports to the FDA on the clinical status of those patients. Failure to comply with the conditions of approval can result in material
adverse enforcement action, including withdrawal of the approval. Certain changes to an approved device, such as changes in manufacturing
facilities, methods, or quality control procedures, or changes in the design performance specifications, which affect the safety or effectiveness
of the device, require submission of a PMA supplement, or in some cases a new PMA.

 Both before and after a medical device is commercially
released, the sponsor has ongoing responsibilities under the FFDCA and FDA regulations. The FDA reviews design and manufacturing practices,
labeling and recordkeeping, and manufacturers' required reports of adverse experiences and other information to identify potential
problems with marketed medical devices. Sponsors are also subject to periodic inspection by the FDA for compliance with the FDA's
QSR, among other FDA requirements, such as requirements for advertising and promotion of medical devices. The sponsor's manufacturing
operations, and those of any third-party manufacturers, are required to comply with the QSR, which require manufacturers, including third-party
manufacturers and suppliers, to follow stringent design, testing, control, maintenance of records and documentation, and other quality
assurance procedures during all aspects of the design and manufacturing process both before and after receiving device clearance or approval.
The QSR requires that each manufacturer establish a quality system by which the manufacturer monitors the manufacturing process and maintains
records that show compliance with the FDA regulations and the manufacturer's written specifications and procedures relating to
each device. QSR compliance is necessary to receive and maintain FDA clearance, approval, or marketing authorization to market new and
existing medical devices, and it is also necessary for distributing in the United States certain devices exempt from FDA clearance and
approval requirements. The FDA conducts announced and unannounced periodic and ongoing inspections of medical device manufacturers, including
third-party manufacturers and suppliers, to determine compliance with the QSR. If in connection with these inspections the FDA believes
the manufacturer has failed to comply with applicable regulations and/or procedures, the FDA may issue inspectional observations on Form
FDA-483, or Form 483, that would necessitate prompt corrective action. If the FDA inspectional observations are not addressed and/or
corrective action is not taken in a timely manner and to the FDA's satisfaction, the FDA may issue a warning letter (which would
similarly necessitate prompt corrective action) and/or proceed directly to other forms of enforcement action, including the imposition
of operating restrictions, including a ceasing of operations, on one or more facilities, enjoining and restraining certain violations
of applicable law pertaining to products, mandating recall of products, seizure of products, and assessing civil or criminal penalties
against the manufacturer and its officers and employees. The FDA could also issue a corporate warning letter or a recidivist warning
letter or negotiate the entry of a consent decree of permanent injunction with the manufacturer. The FDA may also recommend prosecution
to the U.S. Department of Justice, or DOJ. Any adverse regulatory action, depending on its magnitude, may restrict a manufacturer from
effectively manufacturing, marketing, and selling any medical device(s) and could have a material adverse effect on the manufacturer's
business, financial condition, and results of operations.

 After a device is cleared, receives marketing
authorization, or is approved for marketing, numerous pervasive regulatory requirements continue to apply unless a device is explicitly
exempt from them. These include, among other things:

 establishment registration and device
 listing with the FDA;

 continued adherence to the QSR requirements;

 marketing, labeling, advertising,
 and promotion regulations, which require that promotion is truthful, not misleading, fairly
 balanced and provides adequate directions for use, and that all claims are substantiated
 and in accordance with the provisions of the approved label, and which also prohibit the
 promotion of products for unapproved or "off-label" uses and impose other restrictions
 on labeling, in accordance with FDA guidance on off-label dissemination of information and
 responding to unsolicited requests for information;

 clearance or approval of product
 modifications to 510(k)-cleared, De Novo classified or PMA-approved devices that could significantly
 affect safety or effectiveness or that would constitute a major change in intended use of
 a cleared device;

 medical device reporting regulations,
 which require that a manufacturer report to the FDA if a device it markets may have caused
 or contributed to a death or serious injury, or has malfunctioned and the device or a similar
 device that it markets would be likely to cause or contribute to a death or serious injury
 if the malfunction were to occur;

 correction, removal, and recall
 reporting regulations, which require that manufacturers report to the FDA field corrections
 and product recalls or removals if undertaken to reduce a risk to health posed by the device
 or to remedy a violation of the FFDCA that may present a risk to health;

 complying with requirements governing
 Unique Device Identifiers on devices and also requiring the submission of certain information
 about each device to the FDA's Global Unique Device Identification Database;

 the FDA's recall authority,
 whereby the agency can order device manufacturers to recall from the market a product that
 is in violation of governing laws and/or regulations; and

 post-market surveillance activities
 and regulations, which apply when deemed by the FDA to be necessary to protect the public
 health or to provide additional safety and effectiveness data for the device.

 Review And Approval Of Drugs In Europe
And Other Foreign Jurisdictions

 In addition to regulations in the US, a manufacturer
of drugs is subject to a variety of regulations in foreign jurisdictions to the extent they choose to sell any drug products in those
foreign countries. Even if a manufacturer obtains FDA approval of a product, it must still obtain the requisite approvals from regulatory
authorities in foreign countries prior to the commencement of clinical trials or marketing of the product in those countries. To obtain
regulatory approval of an investigational drug or biological product in the European Union, or the EU, a manufacturer must submit a marketing
authorization application, or MAA, to the European Medicines Agency or EMA. For other countries outside of the EU, such as countries
in Eastern Europe, Latin America or Asia, the requirements governing the conduct of clinical trials, product licensing, pricing, and
reimbursement vary from country to country. In all cases, clinical trials are to be conducted in accordance with GCP and the applicable
regulatory requirements and the ethical principles that have their origin in the Declaration of Helsinki. The time required to obtain
approval by a foreign country may be longer or shorter than that required for FDA approval, and the requirements may differ significantly.

 Review And Approval Of Medical Devices
In Europe And Other Foreign Jurisdictions

 In addition to regulations in the US, a manufacturer
of medical devices is subject to a variety of regulations in foreign jurisdictions, which vary substantially from country to country,
to the extent a manufacturer chooses to sell any medical devices in those foreign countries. In those countries, a manufacturer can be
subject to supranational, national, regional, and local regulations affecting, among other things, the development, design, manufacturing,
product standards, packaging, advertising, promotion, labeling, marketing, and postmarket surveillance of medical devices. In order to
market a medical device in other countries, the sponsor must obtain regulatory approvals or certifications and comply with extensive
safety and quality regulations enforced in those countries. The time required to obtain approval or certification by a foreign country
may be longer or shorter than that required for FDA approval or clearance, and the requirements may differ significantly.

 The EU has adopted specific directives and regulations
regulating the design, manufacture, clinical investigation, conformity assessment, labeling, and adverse event reporting for medical
devices. Until May 25, 2021, medical devices were regulated by Council Directive 93/42/EEC, the EU Medical Devices Directive, or MDD,
which had created a single set of medical device regulations for devices marketed in all EU member countries. Compliance with the MDD
and certification to a quality system (e.g., ISO 13485 certification) enabled a manufacturer to place a CE mark on its products. To obtain
authorization to affix the CE mark to a product, a recognized European Notified Body had to assess a manufacturer's quality system
and the product's conformity to the requirements of the MDD.

 The MDD has been repealed and replaced by Regulation
(EU) No 2017/745, the EU Medical Devices Regulation, or MDR, which imposes significant additional premarket and postmarket requirements
on medical devices. The MDR entered into application on May 26, 2021. Under a corrigendum to the MDR finalized in December 2019, some
low-risk medical devices being up-classified as a result of the MDR, including low-risk instruments, were potentially eligible to receive
a transitional period to comply by May 2024 under certain conditions. The European Commission recently extended the implementation period
to the end of 2027 for high-risk devices and to the end of 2028 for medium- and low-risk devices.

 The MDR establishes a uniform, transparent, predictable,
and sustainable regulatory framework across the EU for medical devices and ensures a high level of safety and health while supporting
innovation. Unlike the MDD, the MDR is directly applicable in EU member states without the need for member states to implement the MDR
into national law, with the aim of increasing harmonization across the EU. The MDR, among other things:

 strengthens the rules on placing
 devices on the market (e.g., reclassification of certain devices and wider scope than the
 MDD) and reinforces surveillance once the devices are commercially available;

 establishes explicit provisions
 on manufacturers' responsibilities for follow-up on the quality, performance, and safety
 of devices placed on the market;

 establishes explicit provisions
 on importers' and distributors' obligations and responsibilities;

 imposes an obligation to identify
 a responsible person who is ultimately responsible for all aspects of compliance with the
 requirements of the MDR;

 improves the traceability of medical
 devices throughout the supply chain to the end-user or patient through the introduction of
 a unique identification number, to increase the ability of manufacturers and regulatory authorities
 to trace specific devices through the supply chain and to facilitate the prompt and efficient
 recall of medical devices that have been found to present a safety risk;

 sets up a central database (MDR
 EUDAMED or EUDAMED), which is collaborative and interoperable and functions as a registration
 system, and a collaborative and a dissemination system (partially open to the public) that
 can, among other things, provide patients, healthcare professionals, and the public with
 information on medical devices available in the EU; and

 strengthens rules for the assessment
 of certain high-risk devices, such as implants, which may have to undergo a clinical evaluation
 consultation procedure by experts before they are placed on the market.

 Devices lawfully placed on the market pursuant
to the MDD prior to May 26, 2021, or thereafter if eligible under the MDR transition provisions, may generally continue to be made available
on the market or put into service through the applicable extended transition period, provided that the requirements of the MDR's
transitional provisions are fulfilled. Among other requirements, depending on the class of device, the certificate in question must still
be valid and not withdrawn, an MDR-compliant quality management system must be implemented and an application for a conformity assessment
must be submitted by May 26, 2024, and an agreement for a conformity assessment must be executed with a Notified Body by September 26,
2024. However, even in these cases, manufacturers must comply with a number of new or reinforced requirements set forth in the MDR, in
particular the obligations described below.

 The MDR requires that before placing a
device, other than a custom-made device, on the market, manufacturers (as well as other economic operators such as authorized
representatives and importers) must register by submitting identification information to the electronic system (EUDAMED), unless
they have already registered. The information to be submitted by manufacturers (and authorized representatives) also includes the
name, address, and contact details of the person or persons responsible for regulatory compliance. The MDR also requires that,
before placing a device, other than a custom-made device, on the market, manufacturers must assign a unique identifier to the device
and provide it along with other core data to the unique device identifier, or UDI, database. These new requirements aim at ensuring
better identification and traceability of medical devices. Each device – and, as applicable, each package – will have a
UDI composed of two parts: a device identifier, or UDI-DI, specific to a device, and a production identifier, or UDI-PI, to identify
the unit producing the device. Manufacturers are also responsible for entering the necessary data on EUDAMED, which includes the UDI
database, and for keeping it up to date. The obligations for registration in EUDAMED and other mandatory uses of the system had
originally been planned to start six months after the entire EUDAMED system (including all six modules) had been declared fully
functional following an independent audit and an EU Commission notice to be published in the Official Journal and in accordance with
the transitional provisions set out in the MDR. Based upon updates from the European Commission's Stuttgart workshop in May
2025, EUDAMED is transitioning to a phased implementation model, and this phased implementation, enabled by recent regulation (EU)
2024/1860 amending Regulations (EU) 2017/745 and (EU) 2017/746, replaces the previous all-or-nothing approach with a
module-by-module activation system and enables the gradual implementation of EUDAMED by a roll-out of individual modules once each
individual module is audited and a Commission notice confirming the functionality of the module is published in the Official Journal
of the European Union, or OJEU. The obligations and requirements that relate to a certain module of EUDAMED will become applicable 6
months after the publication in the OJEU of the notice confirming the functionality of the given module. Until the date on which the
obligations and requirements that relate to a certain EUDAMED module become mandatory, the corresponding Directives'
provisions and obligations relating to vigilance, clinical investigations/performance studies, registration of devices and economic
operators., and certificate notifications apply. This is intended to provide for a clear cut-off date when the Directives'
provisions (and the corresponding national transposition measures) cease to apply and the EUDAMED-related provisions become
mandatory, thus preventing double registrations issues. Regulation (EU) 2024/1860 deleted Article 120(8) MDR and Article 110(8)
IVDR, which established that during the transition period from the publication of the notice confirming the functionality of EUDAMED
until its mandatory use for device and certificate registration, the registration of devices and certificates using EUDAMED would
have been considered to comply with the national registration requirements pursuant to the Directives.

 All manufacturers placing medical devices into
the market in the EU must comply with the EU medical device vigilance system. Under this system, serious incidents and Field Safety Corrective
Actions, or FSCAs, must be reported to the relevant authorities of the EU member states. Manufacturers are required to take FSCAs, which
are defined as any corrective action for technical or medical reasons to prevent or reduce a risk of a serious incident associated with
the use of a medical device that is made available on the market. An FSCA may include the recall, modification, exchange, destruction
or retrofitting of the device.

 The advertising and promotion of medical devices
in the EU is subject to some general principles set forth in EU legislation. Under the MDR, only devices that are CE marked may be marketed
and advertised in the EU in accordance with their intended purpose. Directive 2006/114/EC concerning misleading and comparative advertising
and Directive 2005/29/EC on unfair commercial practices, while not specific to the advertising of medical devices, also apply to the
advertising of medical devices and contain general rules, for example, requiring that advertisements are evidenced, balanced, and not
misleading. Specific requirements are defined at a national level. EU member states' laws related to the advertising and promotion
of medical devices, which vary between jurisdictions, may limit or restrict the advertising and promotion of products to the general
public and may impose limitations on promotional activities with healthcare professionals.

 Many EU member states have adopted specific anti-gift
statutes that further limit commercial practices for medical devices, in particular with respect to healthcare professionals and organizations.
Additionally, there has been a recent trend of increased regulation of payments and transfers of value provided to healthcare professionals
or entities, and many EU member states have adopted national "Sunshine Acts" which impose reporting and transparency requirements
(often on an annual basis), similar to the requirements in the US, on medical device manufacturers. Certain countries also mandate implementation
of commercial compliance programs.

 The aforementioned EU requirements are generally
applicable in the European Economic Area, or EEA, which consists of the 27 EU member states plus Norway, Liechtenstein, and Iceland.

 Many other countries have specific requirements
for classification, registration, and post-marketing surveillance that are independent of the countries discussed above. This landscape
is constantly evolving and compliance with the regulatory requirements may require modifications to various systems, additional resources
in certain functions, and updates to technical parameters, among other changes. Rafael Medical Devices could be found in violation if
it interprets the laws incorrectly or fails to keep pace with changes in laws and regulations. In the event of either of these occurrences,
Rafael Medical Devices could be instructed to recall any products that it is marketing, cease manufacturing and/or distribution, and/or
be subject to civil or criminal penalties.

 Pharmaceutical Coverage, Pricing, And Reimbursement

 In the United States and markets in other countries,
patients who are prescribed treatments for their conditions and providers performing the prescribed services generally rely on third-party
payors to reimburse all or part of the associated healthcare costs. Patients are unlikely to use our products unless coverage is provided
and reimbursement is adequate to cover a significant portion of the cost of our products. Significant uncertainty exists as to the coverage
and reimbursement status of products approved by the FDA and other government authorities. Even if one of the Pharmaceutical Companies'
product candidates is approved, sales of the Pharmaceutical Companies' products will depend, in part, on the extent to which third-party
payors, including government health programs in the United States such as Medicare and Medicaid, commercial health insurers, and managed
care organizations, provide coverage, and establish adequate reimbursement levels for, such products. The process for determining whether
a payor will provide coverage for a product may be separate from the process for setting the price or reimbursement rate that the payor
will pay for the product once coverage is approved. Third-party payors are increasingly challenging the prices charged, examining the
medical necessity, and reviewing the cost-effectiveness of medical products and services and imposing controls to manage costs. Third-party
payors may limit coverage to specific products on an approved list, also known as a formulary, which might not include all of the approved
products for a particular indication.

 On May 12, 2025, President Trump signed an Executive
Order titled: "Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients". Among other steps, the Executive
Order directs multiple federal agencies, including the U.S. Department of Health and Human Services, or HHS, to take specific actions
aimed at compelling drug manufacturers to lower drug prices in the United States in a manner comparable with other "developed nations."
HHS subsequently announced that the Department "expects each [drug] manufacturer to commit to aligning [United States] pricing
for all brand products across all markets that do not currently have generic or biosimilar competition with the lowest price of a set
of economic peer countries." HHS indicated that it will calculate the most-favored-nation, or MFN, price as the lowest price in
a country that is part of the Organisation for Economic Co-operation and Development and that has a per capita gross domestic product
(GDP) of at least 60% of the U.S. per capita GDP. In July 2025, President Trump sent letters to leading pharmaceutical manufacturers
outlining the steps they must take to bring down the prices of prescription drugs in the US to match the lowest price offered in other
developed nations. Should any of the Pharmaceutical Companies' products be successfully developed and secure regulatory approval
in the US and foreign countries, and if such MFN policies remain in effect at that time or are reintroduced at a later date and are applied
to any of the Pharmaceutical Companies' products that do secure regulatory approval, if any, such MFN policies could have a material
adverse effect on their and our business, results of operations, financial condition and cash flows.

 There have been, and likely will continue to
be, legislative and regulatory proposals at the foreign, federal, and state levels directed at broadening the availability of healthcare
and containing or lowering the cost of healthcare. Such reforms could have an adverse effect on anticipated revenue from product candidates
that the Pharmaceutical Companies or Rafael Medical Devices may successfully develop and for which they may obtain regulatory approval
and may affect their overall financial condition and ability to develop product candidates.

 Healthcare Law And Regulation

 In addition to FDA restrictions on marketing
of drug products and medical devices, other supranational, national, regional, federal, state, and local laws concerning healthcare fraud
and abuse, including false claims and anti-kickback laws, healthcare professional payment transparency laws, and privacy laws restrict
business practices in the pharmaceutical and medical device industries. These laws have been subject to increased enforcement activities
with respect to medical product manufacturers and distributors in recent years. Violations of these laws are punishable by criminal and/or
civil sanctions, including, in some instances, fines, imprisonment and, within the US, exclusion from participation in government healthcare
programs, including Medicare, Medicaid, Department of Defense, and Veterans Administration health programs. Restrictions under applicable
federal and state and analogous foreign healthcare laws and regulations include the following:

 the federal Anti-Kickback Statute,
 which prohibits, among other things, knowingly and willfully offering, paying, soliciting
 or receiving remuneration to induce or in return for purchasing, leasing, ordering, or arranging
 for or recommending the purchase, lease, or order of any item or service reimbursable under
 Medicare, Medicaid or other federal healthcare programs;

 the federal False Claims Act, which
 prohibits any person from knowingly presenting, or causing to be presented, a false claim
 for payment to the federal government or knowingly making, using, or causing to be made or
 used a false record or statement material to a false or fraudulent claim to the federal government;

 the federal Health Insurance Portability
 and Accountability Act of 1996, or HIPAA, which created additional federal criminal laws
 that prohibit, among other things, knowingly and willfully executing, or attempting to execute,
 a scheme to defraud any healthcare benefit program or making false statements relating to
 healthcare matters;

 HIPAA, as amended by the Health
 Information Technology for Economic and Clinical Health Act, and their respective implementing
 regulations, including the Final Omnibus Rule published in January 2013, which impose obligations,
 including mandatory contractual terms, with respect to safeguarding the privacy, security,
 and transmission of individually identifiable protected health information, including breach
 notification regulations;

 new regulations adopted by the Securities
 and Exchange Commission, or SEC, effective December 18, 2023, that require greater disclosure
 regarding cybersecurity risk management, strategy and governance, as well as disclosure of
 material cybersecurity incidents, which may require reporting of a cybersecurity incident
 before its impact has been fully assessed or the underlying issue has been remediated, which
 could divert management's attention from incident response and could potentially reveal system
 vulnerabilities to threat actors, and for which failure to timely report such incidents under
 these or other similar rules could also result in monetary fines, sanctions or other forms
 of liability;

 analogous state data privacy and
 security laws and regulations that govern the collection, use, disclosure, transfer, storage,
 disposal, and protection of personal information, such as social security numbers, medical
 and financial information, and other information, including data breach laws that require
 timely notification to individuals, and at times regulators, the media or credit reporting
 agencies, if a company has experienced the unauthorized access or acquisition of personal
 information, as well as the California Consumer Privacy Act or CCPA, which, among other things,
 contains new disclosure obligations for businesses that collect personal information about
 California residents and affords those individuals numerous rights relating to their personal
 information that may affect companies' ability to use personal information or share
 it with business partners, and the California Privacy Rights Act, or CPRA, which expands
 the scope of the CCPA, imposes new restrictions on behavioral advertising, and establishes
 a new California Privacy Protection Agency that will enforce the law and issue regulations,
 and became "operative" on January 1, 2023, with a 12-month "lookback provision"
 applicable to personal data collected on or after January 1, 2022, and the various state
 laws and regulations may be more restrictive than and not preempted by United States federal
 laws;

 analogous foreign data protection
 laws, including among others the EU General Data Protection Regulation, or the GDPR, and
 EU member states' implementing legislation, which imposes data protection requirements
 that include strict obligations and restrictions on the ability to collect, analyze, and
 transfer EU personal data, a requirement for prompt notice of data breaches to data subjects
 and supervisory authorities in certain circumstances, and possible substantial fines for
 any violations (including possible fines for certain violations of up to the greater of 20
 million Euros or 4% of total worldwide annual turnover of the preceding financial year),
 with legal requirements in foreign countries relating to the collection, storage, processing,
 and transfer of personal data continuing to evolve and varying widely across jurisdictions;

 the United States civil monetary
 penalties statute, which imposes penalties against any person who is determined to have presented
 or caused to be presented a claim to a federal health program that the person knows or should
 know is for an item or service that was not provided as claimed or is false or fraudulent;

 the federal Physician Payments Sunshine
 Act, which requires certain manufacturers of drugs, devices, biologics, and medical supplies
 to report annually to the Centers for Medicare & Medicaid Services information related
 to payments and other transfers of value made by that entity to physicians and teaching hospitals,
 as well as ownership and investment interests held by physicians and their immediate family
 members;

 analogous state and foreign laws
 and regulations, such as state anti-kickback and false claims laws, which may apply to healthcare
 items or services that are reimbursed by non-governmental third-party payors, including private
 insurers; and

 state laws requiring pharmaceutical
 companies and medical device companies to comply with the pharmaceutical industry's or the
 medical device industry's voluntary compliance guidelines and the relevant compliance
 guidance promulgated by the federal government. State and foreign laws also govern the privacy
 and security of health information in some circumstances, many of which differ from each
 other in significant ways and often are not preempted by HIPAA, thus complicating compliance
 efforts.

 In addition, our operations in foreign countries
are subject to the extraterritorial application of the United States Foreign Corrupt Practices Act, or FCPA. Our global operations are
also subject to foreign anti-corruption laws, such as the United Kingdom Bribery Act, among others. As part of our global compliance
program, we seek to address anti-corruption risks proactively.

 COMPETITION

 We and the Portfolio Companies operate in highly
competitive segments. We and the Portfolio Companies face competition from many different sources, including commercial pharmaceutical
and biotechnology and medical device enterprises, academic institutions, government agencies, and private and public research institutions.
Many of our and the Portfolio Companies' competitors have significantly greater financial, product development, manufacturing and
marketing resources than we and the Portfolio Companies possess. Large pharmaceutical companies and medical device companies have extensive
experience in development, clinical testing and obtaining regulatory approval for drugs and devices. In addition, many universities and
private and public research institutes are active in research in direct competition with us and the Portfolio Companies. We and the Portfolio
Companies also may compete with these organizations to recruit scientists and clinical development personnel. Smaller or early-stage
companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies.

 Our and the Portfolio Companies' competitors
are pursuing the development and/or acquisition of pharmaceuticals, medical devices and over-the-counter ("OTC") products
that target the same diseases, conditions and unmet needs that we and the Portfolio Companies are targeting. If competitors introduce
new products, delivery systems or processes with therapeutic or cost advantages, our and the Portfolio Companies' products can
be subject to progressive price reductions or decreased volume of sales, or both. Most new products that we and the Portfolio Companies
would introduce must compete with other products already on the market or products that are later developed by competitors. The principal
methods of competition for our and the Portfolio Companies' products include quality, efficacy, market acceptance, price, and marketing
and promotional efforts, patient access assistant programs and product insurance coverage and reimbursement.

 We face competition from other entities, including
pharmaceutical and biotechnology companies and governmental institutions that are working on supporting orphan drug designations and
clinical trials for the neurological manifestations of NPC. Some of these entities are well-funded, with more financial, technical
and personnel resources than we have, and have more experience than we do in designing and implementing clinical trials. Two of our competitors
were granted FDA approval one a combination therapy for NPC on September 20, 2024 and the second a monotherapy on September 24,
2024, both products became commercially available in the US in 2025. If we are unable to compete effectively against our current or future
competitors, sales of our Trappsol Cyclo product may not grow and our financial condition may suffer.

 INTELLECTUAL PROPERTY

 Licenses

 LipoMedix maintains an exclusive license agreement
with Yissum Research and Development Company, the technology transfer arm of the Hebrew University of Jerusalem granting LipoMedix the
exclusive right to make, use and sell products covered under specified patents relating to the mitomycin lipophilic prodrug and its liposomal
formulation (Promitil) with the right to grant sublicenses. LipoMedix also maintains an exclusive license agreement with
Shaare Zedek Scientific Company, the technology transfer arm of Shaare Zedek Medical Center ("SZMC"), granting LipoMedix
the exclusive right to license any new intellectual property developed at SZMC relating to the mitomycin lipophilic prodrug and its liposomal
formulation (Promitil) with the right to grant sublicenses.

 Cornerstone maintains (i) an exclusive license agreement with the Research
Foundation of the State University of New York at Stony Brook, or RF, granting Cornerstone the exclusive right to make, use and sell products
covered under specified technology relating to lipoic acid derivatives with the right to grant sublicenses. This license agreement was
amended in 2004, 2007 and 2017 and (ii) Cornerstone maintains a low single-digit royalty agreement with Altira Capital and Consulting,
LLC ("Altira"), pursuant to which Cornerstone is granted sole ownership of certain patents directed to lipoic acid derivatives
and other technology. Rafael possesses a two-thirds ownership interest in Altira.

 Patents

 The designation of Trappsol Cyclo
as an orphan drug for the treatment of NPC1 by the FDA and European regulators would provide Cyclo with seven years in the US, and 10
to 12 years in the EU, of market exclusivity, respectively, if it were to receive regulatory approval for its designated orphan indication.
Cyclo also protected its Trappsol and Aquaplex trademarks by registering them with the USPTO. In July
2024, Cyclo received a notice of decision from the European Patent Office to grant a patent application regarding the methods to treat
Alzheimer's Disease, with an effective date of August 21, 2024.

 LipoMedix owns or in-licenses several families
of U.S. patents. Additional patent applications may be filed as studies continue. Patents that LipoMedix has obtained and patents that
may issue in the future based on LipoMedix's currently pending patent applications for its platform technologies are scheduled
to expire in years 2032 through 2040. These dates do not include potential patent term extensions.

 Four patent applications covering the use of
Promitil, in combination with other chemotherapies and with radiotherapy, targeting of Promitil with a folate ligand,
and a reformulation of Promitil with co-encapsulated mitomycin prodrug and doxorubicin have been approved by the USPTO
or EPO in 2018-2020. The patent portfolio is currently comprised of four granted families of patents and two applications under review.

 Barer has filed patents for its novel inventions,
and has entered into licensing agreements for other intellectual property. Patent applications have been filed in the name of Farber
Partners, LLC (Barer's subsidiary) in the areas of T-cell nutrients to enhance checkpoint inhibition and one-carbon metabolism,
and serine hydroxymethyltransferase (SHMT) inhibitors for therapies directed to treatment of cancer, autoimmune disease and fibrotic
disease. In the area of T-cell nutrients, a Patent Cooperation Treaty Application (PCT) was filed on July 15, 2022, claiming priority
to two US provisional applications that were filed in July and December of 2021. The PCT application entered the US national phase and
the European regional phase in January of 2024. In the area of SHMT inhibitors, a US provisional application was filed on May 22, 2025.
Pursuant to a Collaboration and Assignment Agreement between Farber and Ludwig Institute for Cancer Research Ltd. ("Ludwig"),
Farber assigned its rights to these patents relating to T-cel nutrients to Ludwig. Farber and Ludwig also entered into a license agreement
for its T-Cell Nutrient technology and Farber will receive a royalty upon the achievement of certain milestones and sales related to
the product.

 Cornerstone patents its technology, inventions,
and improvements that it considers important to the development of its business. Cornerstone also has obtained U.S. orphan drug designation
(ODD) for CPI-613 (devimistat) in the treatment of Pancreatic cancer, AML, MDS, Burkitt's Lymphoma, Peripheral T-cell Lymphoma
(PTCL), Soft tissue sarcoma, and Biliary cancer, and EMA ODD for Pancreatic cancer, AML, Burkitt's Lymphoma, and Biliary cancer.

 Cornerstone maintains US. and international trademarks
covering its lead development compound (CPI-613 (devimistat)). U.S. and international trademarks are also maintained for potential
brand names of devimistat that potentially could be used if it were to receive regulatory approval permitting commercialization and if
such brand names were to receive the requisite regulatory clearance.

 Rafael Medical Devices patents its technology,
inventions, and improvements that it considers important to the development of its business and seeks to expand its intellectual property
portfolio. As of September 16, 2023, Rafael Medical Devices had filed the following patent applications related to its devices with the
USPTO and PCT: patent application entitled, Compression Anchor Systems, Devices, Instruments, Implants and Methods of Assembly and Use;
and patent application entitled Videoscopic Arthroscopic Instruments, Devices, and Systems and Methods of Use and Assembly.

 Day Three Labs Manufacturing, a majority-owned
subsidiary of Day Three Labs, owns several families of US and international patents and patent applications related to increasing the
bioavailability of cannabinoids. Day Three Labs Manufacturing has also filed for trademark protection over the use of the term UNLOKT,
which it uses as the brand name for the other third-party manufacturers' cannabinoids processed using its technology.

 Additional patent and trademark applications
may be filed as development progresses across the Portfolio Companies as deemed to be in its best interest.

 MANUFACTURING

 Neither we nor the Portfolio Companies own or
operate, and currently have no plans to establish, any manufacturing facilities or fill-and-finish facilities. The Pharmaceutical Companies
currently rely, and we expect us and them to continue to rely, on third parties for the manufacture of their product candidates for preclinical
and clinical testing, as well as for commercial manufacture of any products that they may commercialize should they receive regulatory
approval. The Pharmaceutical Companies obtain supplies from these established contract manufacturers on a purchase-order basis and do
not have long-term supply arrangements in place. The Pharmaceutical Companies do not currently have arrangements in place for a redundant
supply of bulk drug substance or drug product, however, they may seek to add that capability if they move toward regulatory approval
and potential commercialization of specific candidates. For all of the product candidates, the Pharmaceutical Companies intend to identify
and qualify additional manufacturers to provide the active pharmaceutical ingredient and the formulation and fill-and-finish.

 We are developing our lead product candidate, Trappsol
Cyclo, for the proposed treatment of NPC1. We own all manufacturing and commercial rights to the product and have manufactured
using a validated, commercial-scale process using a team of contract manufacturing service providers.

 LipoMedix's Promitil and
other pipeline candidates are based on an active pharmaceutical ingredient (API) referred to as MLP (abbreviation of mitomycin-C lipid-based
prodrug) that is formulated into customized nanoparticles. These nanoparticles consist of lipids and a polyethylene-glycol (PEG) polymer
and are known as pegylated liposomes. LipoMedix obtains bulk drug substance and drug product supplies from established contract manufacturers
on a purchase order basis and does not have long-term supply arrangements in place. LipoMedix does not currently have arrangements in
place for commercial supply or redundant supply for bulk drug substance or drug product.

 Rafael Medical Devices optimizes supply chains
and manufacturing on a device per device basis focusing on quality, time, and cost. At present, Rafael Medical Devices does not own or
operate manufacturing facilities. Rafael Medical Devices' management has relationships with top tier manufacturers that it leverages
on an as-needed basis. On December 11, 2024, Rafael Medical Devices received a substantial equivalence determination for the VECTR System
from the Food and Drug Administration's ("FDA") in response to Rafael Medical Devices' 510(k) premarket notification.
The FDA's clearance of the VECTR System is for use in minimally invasive ligament or fascia release surgeries, such as carpal tunnel
release in the wrist and cubital tunnel release in the elbow. The VECTR System has been classified into Class II and is subject to special
controls (performance standards). The Company's development of future products will depend upon the success of the VECTR System
and the Company's ability to identify attractive opportunities in the marketplace.

 Cornerstone owns all manufacturing to its lead
development compound CPI-613 (devimistat) and has it manufactured using a validated, commercial-scale process using a team of contract
manufacturing service providers.

 Our current commercial real estate holdings consist
of a portion of a building in Israel. Prior to its sale in August 2022, we also owned the 520 Property.

 On August 22, 2022, we completed the sale of
the 520 Property for a purchase price of $49.4 million.

 The 520 Property was encumbered by a mortgage
securing a $15 million loan which was paid off in this transaction. After repaying the loan, and paying commissions, taxes, and other
costs, the Company received a net amount of approximately $33 million at closing.

 The 520 Property serves as the headquarters of
the Company and affiliated entities, IDT Corporation ("IDT"), and Genie Energy, Ltd. ("Genie"), who occupy the
third through fourth floors.

 Our holding in Israel is a condominium portion
of an office building built in 2004 located in the Har Hotzvim section of Jerusalem, Israel. The condominium is one floor comprising
approximately 12,400 gross square feet including 24 indoor parking spaces. Har Hotzvim is a high-tech industrial park located in northwest
Jerusalem. It is the city's main zone for science-based and technology companies, among them Intel, Teva and Mobileye. As of July 31,
2025, the space is fully leased to two tenants; one of which is an IDT subsidiary.

 Depreciation expense of property, plant and equipment
was $146 thousand and $137 thousand for the years ended July 31, 2025 and 2024, respectively. Depreciation expense for the year
ended July 31, 2025 includes depreciation of acquired assets from the Day Three Acquisition, Cornerstone Acquisition and Cyclo Merger.

 COMPETITION

 With respect to our real estate business, we
compete for commercial (office and retail) tenants in Jerusalem, Israel. The commercial real estate market is highly competitive. Numerous
commercial properties compete with us for tenants based on location, rental rates, tenant allowances, operating expenses and the quality
and design of the property. Other factors tenants consider are; quality and breadth of tenant services provided, onsite amenities and
reputation of the owner and property manager.

 OUR STRATEGY

 Our strategy related to our real estate business
is to continue to operate and maximize the value of our real estate holding in Israel.

 HUMAN CAPITAL

 Attracting and retaining qualified personnel
familiar with our businesses who head our different businesses units is critical to our success. As of October 27, 2025, Rafael Holdings
and its subsidiaries had 21 full-time and 2 part-time employees. Our human capital resources objectives include, as applicable, identifying,
recruiting, retaining, incentivizing and integrating our existing and new employees, advisors and consultants. To accomplish that, our
compensation practices are designed to attract and retain qualified and motivated personnel and align their interests with the goals
of the Company and with the best interests of our stockholders. Our compensation philosophy is to provide compensation to attract the
individuals necessary for our current needs and growth initiatives, and provide them with the proper incentives to motivate those individuals
to achieve our long-term plans, which includes among other things, equity and cash incentive plans that attract, retain and reward personnel
through the granting of stock-based and cash-based compensation awards.

 We believe that talent attraction and retention
are critical to our ability to achieve our strategy and that a trained, diverse and inspired workforce is integral to delivering on our
objectives. Our recruiting process reaches a wide array of potential employees, and we employ a rigorous screening process to ensure
that we identify and hire quality professionals. We work to ensure that compensation and benefits offered to employees are fair and reflects
industry standards and best practices.

 We are committed to diversity and inclusion in
the workforce including a policy of non-discriminatory treatment and respect of human rights for all current and prospective employees.
Discrimination on the basis of an individual's race, religion, creed, color, sex, sexual orientation, age, marital status, disability,
national origin or veteran's status is not permitted by us and is illegal in many jurisdictions. We respect the human rights of
all employees and strive to treat them with dignity consistent with standards and practices recognized by the international community.

 Item 1A. Risk Factors

 RISK FACTORS

 Our business, operating results or financial
condition could be materially adversely affected by any of the following risks associated with any one of our businesses, as well as
the other risks highlighted elsewhere in this document. The trading price of our common stock could decline due to any of these risks.
Note that references to "our", "us", "we", "the Company", etc. used in each risk factor
below refers to the business about which such risk factor is provided.

 Risks Related to Our Financial Condition
and Capital Needs

 We have limited resources and could find
it difficult to raise additional capital.

 We may need to raise additional capital for operations
and in order for stockholders to realize increased value on our securities. If the current Phase 3 trial for Trappsol Cyclo
 is successful, we will likely need to raise capital for the manufacturing, distribution and potential commercialization of Trappsol
 Cyclo. Given the current global economy and other factors, if we need to raise additional capital, there can be no
assurance that we will be able to obtain the necessary funding on commercially reasonable terms in a timely fashion or at all. Failure
to receive the funding could have a material adverse effect on our business, prospects, and financial condition.

 Our limited operating history makes it
difficult to evaluate our business and prospects and may increase your investment risk.

 We have only a limited operating history upon
which our business and prospects can be evaluated. We expect to encounter risks and difficulties frequently encountered by early-stage
companies in the industries in which we operate.

 We have not yet demonstrated our ability to successfully
complete any large-scale, pivotal clinical trials, obtain regulatory approvals, manufacture a commercial scale medicine, or arrange for
a third party to do so on our behalf, or conduct sales and marketing activities necessary for successful commercialization of any product
that might receive regulatory approval. Typically, it takes about ten to fifteen years to develop one new medicine from the time it is
discovered to when it is available for treating patients. Consequently, any predictions made about our future success or viability may
not be as accurate as they could be if we had a longer operating history.

 In addition, we may encounter unforeseen expenses,
difficulties, complications, delays and other known and unknown factors and risks frequently experienced by clinical stage biopharmaceutical
companies in rapidly evolving fields. We will also need to transition from a company with a research focus to a company capable of supporting
commercial activities should any regulatory approval be secured, if any. If we do not adequately address these risks and difficulties
or successfully make such a transition, our business will suffer, our future revenue potential may be impacted, and our ability to pursue
our growth strategy and attain profitability could be compromised.

 We hold significant cash, cash equivalents,
and investments that are subject to various market risks.

 As of July 31, 2025, we held approximately $52.8
million in cash and cash equivalents, $1.2 million in other receivables, and $0.6 million in third-party and related party receivables.
Our passive interests in other entities are not currently liquid, and we cannot assure that we will be able to liquidate them when we
desire, or ever. As a result of these different market risks, our holdings of cash, cash equivalents, and investments could be materially
and adversely affected.

 We may not be able to consummate any investment,
business combination or other transaction.

 While we seek corporate development opportunities,
we may not be able to find any suitable target businesses and consummate an investment, business combination or other transaction. Our
ability to complete any such transactions may be negatively impacted by general market conditions, volatility in the debt and equity
markets, decreased market liquidity, and third-party financing being unavailable on terms acceptable to us or at all.

 Risks Related to our Pharmaceuticals Business

 Our future success may depend on the results
of the ongoing Phase 3 trial for Trappsol Cyclo. If we are unable to obtain regulatory approval or successfully
commercialize Trappsol Cyclo or experience significant delays in doing so, our business will be materially harmed.

 We have invested a significant amount of capital
in Cyclo and the development and clinical activity for Trappsol Cyclo. Our dependence on the success of Trappsol Cyclo
and the need for additional capital will increase if the Phase 3 trial for Trappsol Cyclo is successful. Based
on the independent DMC review of safety and efficacy data at the prespecified 48-week interim analysis, in June 2025, the DMC recommended
to continue the trial to 96 weeks.

 The success of Trappsol Cyclo is
beyond our control, and the drug development and regulatory approval processes could cause significant delay or prevent us from obtaining
regulatory approval or commercializing Trappsol Cyclo or any other product candidates. If we are is unable to develop, obtain
regulatory approval for, or, if approved, successfully commercialize its product candidates, we may not be able to generate sufficient
revenue to continue our business.

 Even if we were to obtain FDA approval
for Trappsol Cyclo for treatment of the designated Rare Pediatric Disease NPC1, the Rare Pediatric Disease Priority
Review Voucher Program may no longer be in effect or may have been revised at the time of any such approval, or we or they might not
be able to capture the value of the Rare Pediatric Disease Priority Review Voucher Program even if the program is still in effect.

 Rare pediatric disease designation by the FDA
is granted in the case of serious or life-threatening diseases affecting fewer than 200,000 people in the United States in which the
serious or life-threatening manifestations are primarily in individuals 18 years of age and younger. The designation provides regulatory
incentives for companies to develop and market therapies that treat these conditions. The sponsor of a drug for a rare pediatric disease
may be eligible for a PRV upon approval of the drug that can be used to obtain a priority review of a subsequent marketing application
for a different product. The PRV may be sold or transferred an unlimited number of times. A Rare Pediatric Disease designation does not
lead to faster development or regulatory review of the product, or increase the likelihood that it will receive marketing approval.

 Even if Trappsol Cyclo
were to be approved, it is not certain that we would be awarded a PRV as we may no longer meet the conditions for such an award at the
time of such approval, if any. Designation of a drug as a drug for a rare pediatric disease does not guarantee that an NDA or BLA for
such drug will meet the eligibility criteria for a rare pediatric disease PRV at the time the application is approved. Under the FFDCA,
Cyclo will need to request a rare pediatric disease priority review voucher in any original NDA it submits for Trappsol Cyclo.
The FDA may determine that an NDA for Trappsol Cyclo, if it were to be submitted and approved, does not meet the
eligibility criteria for a PRV at the time of any approval, including for the following reasons:

 NPC1 no longer meets the definition
 of a rare pediatric disease;

 the NDA contains an active ingredient
 that has been previously approved by the FDA;

 the NDA does not rely on clinical
 data derived from studies examining a pediatric population and dosages of the drug intended
 for that population (that is, if the NDA does not contain sufficient clinical data to allow
 for adequate labeling for use by the full range of affected pediatric patients); or

 the NDA is approved for a different
 adult indication than the rare pediatric disease NPC1 for which Trappsol Cyclo
 is designated.

 In addition, the FDA may revoke any PRV if the
rare pediatric disease drug for which the voucher was awarded is not marketed in the U.S. within one year following the date of approval.

 Under the current statutory sunset provisions,
Congress extended the Rare Pediatric Disease Priority Review Voucher program until September 30, 2024, with new drug approvals that meet
the voucher criteria effectively grandfathered through September 30, 2026. This program has been subject to criticism, including by the
FDA, and it is possible that, even if we were to obtain approval for Trappsol Cyclo and otherwise qualify for
such a PRV, the program may no longer be in effect at the time of approval. Absent a reauthorization or other extension of the program,
if an NDA for Trappsol Cyclo is not approved prior to September 30, 2026 for any reason, regardless of whether
it meets the criteria for a rare pediatric disease PRV, it will not be awarded a PRV because the FDA currently may not award any rare
pediatric disease PRVs after that date under current law. Even if legislation is enacted that extends the date by which approval of the
rare pediatric disease-designated drug must obtain approval to receive a PRV, we may not obtain approval by that date, and even if we
do, we may not obtain a PRV. Moreover, any Congressional reauthorization of this program may include new or different terms or eligibility
requirements, and the FDA may determine that any marketing application for Trappsol Cyclo, if it were to be submitted
and approved, does not meet the reauthorized eligibility criteria for awarding a PRV.

 PRVs may be sold or transferred to third parties,
and, in some instances, recipients of PRVs have transferred them to other drug developers in exchange for substantial financial consideration.
Even if we were to receive a PRV, there can be no assurance that we will be able to apply it to review of one of our other drug candidates
or to transfer it for substantial financial consideration, if at all, or otherwise realize any value from it.

 We rely upon third parties for the manufacture
of Trappsol Cyclo and are dependent on their quality and effectiveness.

 Trappsol Cyclo requires precise,
high-quality manufacturing. The failure to achieve and maintain high manufacturing standards, including the failure to conform to c-GMPs
(current Good Manufacturing Practices), or to detect or control anticipated or unanticipated manufacturing errors or the frequent occurrence
of such errors, could result in discontinuance or delay of ongoing or planned clinical trials, delays or failures in product testing
or delivery, cost overruns, product recalls or withdrawals, patient injury or death, and other problems that could seriously hurt our
business. Contract drug manufacturers often encounter difficulties involving production yields, quality control and quality assurance
and shortages of qualified personnel. These manufacturers are subject to stringent regulatory requirements, including the FDA's
c-GMP regulations and similar foreign laws and standards. If our contract manufacturers fail to maintain ongoing compliance at any time,
the production of our product candidates could be interrupted, resulting in delays or discontinuance of our clinical trials, additional
costs and loss of potential revenues.

 We are dependent on the Cyclo management team,
and our ability to advance the development, clinical testing, regulatory approval of our lead candidate, Trappsol Cyclo
may be materially and adversely affected if we lose them.

 The success of Cyclo to date has largely depended
on the efforts and abilities of the Cyclo management team and our ability to advance our efforts of our Cyclo subsidiary could be materially
and adversely affected if, for any reason, members of the management team leave.

 A small number of our customers account
for a substantial portion of our revenue, and the loss of any of these customers would materially decrease our revenues.

 Following consummation of the Cyclo Merger, sales
of cyclodextrin products for research purposes generates a significant portion of our revenues. During the year ended July 31, 2025,
one major customer from this revenue stream accounted for 25% of total revenues. Accounts receivable balances for this major customer
represents 26% of total accounts receivable at July 31, 2025. We have a contract with only one of our major customers. The loss
of this customer would materially decrease our revenues if we were unable to replace such customer.

 We are dependent on certain third-party
suppliers.

 Cyclo purchases the cyclodextrin products it
sells as part of its legacy fine chemical business from third-party suppliers and depends on those suppliers for the cyclodextrins it
uses in its Aquaplex fine chemical business products. Cyclo is also dependent on outside manufacturers that use lyophilization techniques
for its Aquaplex fine chemical business products. Cyclo purchases substantially all of its Trappsol fine chemical business
products from bulk manufacturers and distributors in the U.S., Japan, China, and Europe. Although products are available from multiple
sources, an unexpected interruption of supply, or material increases in the price of products, for any reason, such as regulatory requirements,
tariffs, import restrictions, loss of certifications, power interruptions, fires, hurricanes, war or other events could have a material
adverse effect on our business, results of operations, financial condition and cash flows.

 We may be negatively affected by currency
exchange rate fluctuations.

 Our Product revenues and cash flows are influenced
by currency fluctuations due to the geographic diversity of our suppliers, which may have a significant impact on our financial results.
As we buy inventory from foreign suppliers, the change in the value of the U.S. dollar in relation to the Euro, Yen and Yuan has an effect
on our cost of inventory, and will continue to do so. We buy most of our products from outside the U.S. using U.S. dollars. Our main
supplier of specialty cyclodextrins and complexes, Cyclodextrin Research & Development Laboratory, is located in Hungary and its
prices are set in Euros. The cost of our bulk inventory often changes due to fluctuations in the U.S. dollar. These products currently
represent a significant portion of our revenues. When we experience short-term increases in currency fluctuation or supplier price increases,
we are often not able to raise our prices sufficiently to maintain our historical margins and therefore, our margins on these sales may
decline. If the U.S. dollar weakens against foreign currencies, the translation of these foreign currency denominated transactions may
adversely affect our results of operations and financial condition.

 We may be negatively affected by tariffs
imposed on imported and/or exported products.

 The current U.S. presidential administration
has announced a wide range of tariffs on certain ingredients, inputs and imports from many countries, including Canada, Mexico, members
of the European Union, the United Kingdom, and China. The imposition of such tariffs potentially may result in increased costs to raw
materials sourced outside the US. For example, glass sourced from the EU and Cyclodextrins from China. We are continuing to monitor the
rapidly evolving tariff and global trade policies and are working with our suppliers to mitigate potential impacts on our business. The
extent and duration of the tariffs and the resulting impact on general economic conditions and on our business are uncertain and depend
on various factors, such as recent legal challenges to the U.S.'s imposition of tariffs, negotiations between the U.S. and affected countries,
the responses of other countries or regions, relief that may be granted, availability and cost of alternative sources of supply and demand
for our products in affected markets. The uncertainty of the tariffs could impact our financial condition or results of operations. Furthermore,
our competitors may be less exposed to tariff impacts or in a better position to mitigate the increased costs of tariffs.

 We may not be successful in our efforts
to identify or discover potential product candidates.

 Our business strategy includes elements for us
and entities in which we invest to identify, create and test compounds, and where regulatory requirements are met, to advance clinical
testing of those and other compounds. A significant portion of the research that the Pharmaceutical Companies are conducting involves
new compounds and drug discovery methods and suitable drug delivery systems, including the Pharmaceutical Companies' proprietary
technology. The drug discovery that the Pharmaceutical Companies are conducting using the Pharmaceutical Companies' proprietary
technologies may not be successful in identifying compounds that are useful in treating cancer or other ailments. The Pharmaceutical
Companies' research programs may initially show promise in identifying potential product candidates, yet fail to yield product
candidates that, subject to meeting regulatory requirements, have the potential for initiating clinical development for a number of reasons,
including:

 the research methodology used may
 not be successful in identifying appropriate biomarkers, potential product candidates or
 effective carrier systems to confer a safe and effective drug delivery mechanism or a drug
 delivery advantage;

 potential product candidates may,
 on further study, be shown to not be effective, have harmful side effects or other characteristics
 that indicate that they are unlikely to be medicines that will receive regulatory approval
 and achieve market acceptance.

 Research programs to identify new product candidates
require substantial technical, financial, and human resources. The Pharmaceutical Companies may choose to focus the Pharmaceutical Companies'
efforts and resources on a potential product candidate that ultimately proves to be unsuccessful.

 If the Pharmaceutical Companies are unable to
identify suitable compounds for preclinical and clinical development, and/or are unable to successfully meet regulatory requirements
or initiating clinical trials and secure regulatory approval for any such compounds, the Pharmaceutical Companies will not be able to
obtain product revenue in future periods, which likely would result in significant harm to the Pharmaceutical Companies' financial
position and adversely impact the Pharmaceutical Companies' valuation and our business.

 We and the Portfolio Companies may expend
our and their limited resources to pursue a particular product candidate or an indication and fail to capitalize on product candidates
or indications that may be more profitable or for which there is a greater likelihood of success.

 Because the Pharmaceutical Companies have limited
financial and managerial resources, their focus on research programs and product candidates that they may or will identify for specific
indications may not be exhaustive. As a result, the Pharmaceutical Companies may forego or delay pursuit of opportunities with other
product candidates or for other indications that later prove to have greater commercial potential. The Pharmaceutical Companies'
resource allocation decisions may cause them to fail to capitalize on viable commercial medicines or profitable market opportunities.
The Pharmaceutical Companies' spending on current and future research and development programs and product candidates for specific
indications may not yield any commercially viable medicines. If the Pharmaceutical Companies do not accurately evaluate the commercial
potential or target market for a particular product candidate, they may relinquish valuable rights to that product candidate through
collaboration, licensing or other royalty arrangements, or outright product relinquishment in cases in which it would have been more
advantageous for them to retain sole development and commercialization rights to such product candidate.

 Preclinical and clinical drug development
is a lengthy and expensive process, with an uncertain outcome. Our and the Pharmaceutical Companies' preclinical and clinical programs
may experience delays or may never advance, which would adversely affect the ability to obtain regulatory approvals for product candidates,
or commercialize any product candidates for which regulatory approval is obtained, on a timely basis or at all, which could have an adverse
effect on our business.

 In order to obtain FDA approval to market a new
drug, the product sponsor must demonstrate the safety and efficacy of the new drug in humans to the satisfaction of the FDA. To meet
these requirements, the Pharmaceutical Companies will have to conduct extensive studies, including pre-clinical studies and adequate
and well-controlled clinical trials. Clinical testing is very expensive, time-consuming, and subject to uncertainty.

 Before the Pharmaceutical Companies can commence
clinical trials for a product candidate, they must complete extensive nonclinical and preclinical studies that support their planned
and future INDs in the United States. We cannot be certain of the timely completion or outcome of the Pharmaceutical Companies'
nonclinical and preclinical studies and cannot predict if the FDA will allow their proposed clinical programs to proceed or if the outcome
of their nonclinical and preclinical studies will ultimately support further development of their programs. We also cannot be sure that
the Pharmaceutical Companies will be able to submit INDs or similar applications with respect to their product candidates on the timelines
we expect, if at all, and we cannot be sure that submission of IND or similar applications will result in the FDA or other regulatory
authorities allowing clinical trials to begin.

 Conducting nonclinical and preclinical testing
and clinical trials represents a lengthy, time-consuming, and expensive process. The length of time may vary substantially according
to the type, complexity, and novelty of the program, and often can be several years or more per development program. Delays associated
with programs for which the Pharmaceutical Companies are conducting nonclinical and preclinical studies may cause them to incur additional
operating expenses. The commencement and rate of completion of nonclinical and preclinical studies and clinical trials for a product
candidate may be delayed by many factors, including, for example:

 inability to generate sufficient
 nonclinical and preclinical or other in vivo or in vitro data to support the initiation of
 clinical studies;

 timely completion of nonclinical
 and preclinical laboratory tests, animal studies, and formulation studies in accordance with
 FDA's good laboratory practice requirements and other applicable regulations;

 inability to secure approval by
 an independent Institutional Review Board, or IRB, or ethics committee at each clinical site
 before each trial may be initiated;

 delays in reaching a consensus with
 regulatory agencies on study design and obtaining regulatory authorization to commence clinical
 trials;

 delays in reaching agreement on
 acceptable contractual terms with prospective contract research organizations, or CROs, and
 clinical trial sites, the terms of which can be subject to extensive negotiation and may
 vary significantly among different CROs and clinical trial sites and across different jurisdictions;

 delays in identifying, recruiting
 and training suitable clinical investigators;

 delays in recruiting eligible patients
 to participate in clinical trials;

 delays in manufacturing, testing,
 releasing, validating or importing/exporting sufficient stable, cGMP-compliant quantities
 of product candidates for use in clinical trials;

 insufficient or inadequate supply
 or quality of product candidates or other materials necessary for use in clinical trials,
 or delays in sufficiently developing, characterizing or controlling a manufacturing process
 suitable for clinical trials;

 imposition of a temporary or permanent
 clinical hold by regulatory authorities;

 developments on trials conducted
 by competitors for related technology or medical products that raise FDA or foreign regulatory
 authority concerns about risk to patients of the technology broadly, or if the FDA or a foreign
 regulatory authority finds that the investigational protocol or plan is clearly deficient
 to meet its stated objectives;

 delays in recruiting, screening
 and enrolling patients and delays caused by patients withdrawing from clinical trials or
 failing to return for post-treatment follow-up;

 challenges in collaborating with
 patient groups and investigators;

 failure by CROs, other third parties
 or the Pharmaceutical Companies to adhere to clinical trial protocols;

 failure by CROs, other third parties
 or the Pharmaceutical Companies to perform in accordance with the FDA's or any other
 regulatory authority's good laboratory practices, or GLPs, good clinical practice requirements,
 or GCPs, or other applicable regulatory guidelines in the US or other countries;

 occurrence of adverse events associated
 with the product candidate that are viewed to outweigh its potential benefits, or occurrence
 of adverse events in a clinical trial of the same class of agents conducted by other companies;

 changes to the clinical trial protocols;

 clinical sites deviating from trial
 protocols or dropping out of a trial;

 changes in regulatory requirements
 and guidance, or data from an ongoing or other studies, that require amending or submitting
 new clinical protocols;

 changes in the standard of care
 on which a clinical development plan was based, which may require new or additional trials;

 selection of inclusion and/or exclusion
 criteria that significantly inhibit the ability to recruit patients into clinical trials;

 selection of clinical endpoints
 that require prolonged periods of observation or analyses of resulting data;

 the cost of clinical trials of the
 Pharmaceutical Companies' product candidates being greater than anticipated;

 interruptions of and/or delays in
 the clinical trials of the Pharmaceutical Companies' product candidates and the potential
 impact of such interruptions or delays on a product candidate's development program
 and the validity of clinical data result from a product candidate's development program;

 clinical trials of the Pharmaceutical
 Companies' product candidates producing negative or inconclusive results, which may
 result in our or their deciding, or regulators requiring us, to amend clinical trial protocols,
 conduct additional clinical trials or abandon development of such product candidates;

 transfer of manufacturing processes
 to larger-scale facilities operated by a contract manufacturing organization, or CMO, and
 delays or failure by CMOs or the Pharmaceutical Companies to properly implement such manufacturing
 processes or make any necessary changes to those processes and secure the requisite regulatory
 approvals; and

 third parties being unwilling or
 unable to satisfy their contractual obligations to us or the Pharmaceutical Companies.

 In addition, disruptions caused by the COVID-19
pandemic and subsequent variants may increase the likelihood that the Pharmaceutical Companies encounter difficulties or delays in initiating,
enrolling, conducting or completing any planned and ongoing nonclinical and preclinical studies and clinical trials. Any inability by
the Pharmaceutical Companies to successfully initiate or complete nonclinical and preclinical studies or clinical trials could result
in additional costs or impair our ability to generate revenue from future product sales of any product candidates that were thought to
be on track to receive regulatory approval. In addition, if the Pharmaceutical Companies make manufacturing or formulation changes to
their product candidates that already have undergone or are undergoing clinical evaluation, they may be required to or may elect to conduct
additional studies to bridge modified product candidates to earlier versions. Clinical trial delays could also shorten any periods during
which any marketed products have patent protection and may allow our competitors to bring products to market before we do, which could
impair our ability to successfully commercialize the Pharmaceutical Companies' product candidates and may seriously harm our business.

 Further, conducting clinical trials in foreign
countries, as the Pharmaceutical Companies may do for their product candidates, presents additional risks that may delay completion of
clinical trials. These risks include the failure of patients enrolled in clinical trials in foreign countries to adhere to clinical protocols
as a result of differences in healthcare services or cultural customs, the utilization of alternative standards of care in foreign countries
and the failure to conduct foreign clinical trials according to standards of care that FDA considers comparable to the standards of care
in the US, failure of the Pharmaceutical Companies to persuade the FDA as to the scientific robustness and clinical acceptability of
the data from any such foreign clinical trials, managing additional administrative burdens associated with foreign regulatory schemes,
as well as political, economic, and public health risks relevant to such foreign countries.

 Moreover, principal investigators for the Pharmaceutical
Companies' clinical trials may serve as scientific advisors or consultants to the Pharmaceutical Companies from time to time and
receive compensation in connection with such services. Under certain circumstances, the Pharmaceutical Companies may be required to report
some of these relationships to the FDA or state authorities or comparable foreign regulatory authorities. The FDA or state authorities
or comparable foreign regulatory authority may conclude that a financial relationship between the Pharmaceutical Companies and a principal
investigator has created a conflict of interest or otherwise affected conduct of the study or interpretation of the study results. The
FDA or comparable foreign regulatory authority may therefore question the integrity of the data generated at the applicable clinical
trial site, and the utility of the clinical trial itself may be jeopardized. This could result in a delay in approval, or rejection,
of marketing applications by the FDA or comparable foreign regulatory authority, as the case may be, and may ultimately lead to the denial
of regulatory approval of one or more product candidates.

 Delays in the completion of any preclinical studies
or clinical trials of the Pharmaceutical Companies' product candidates will increase our costs, slow down product candidate development
and approval processes, and delay or potentially jeopardize our ability to commence product sales and generate product revenue from any
product candidate that might receive regulatory approval. In addition, many of the factors that cause, or lead to, a delay in the commencement
or completion of clinical trials may also ultimately lead to the denial of regulatory approval of a product candidate. Any delays to
the Pharmaceutical Companies' preclinical studies or clinical trials that occur as a result could shorten any period during which
they may have the exclusive right to commercialize such product candidates, and their competitors may be able to bring products to market
before they do, and the commercial viability of any product candidates could be significantly reduced. Any of these occurrences may harm
our business, financial condition, and prospects significantly.

 If the Pharmaceutical Companies experience
delays or difficulties in the enrollment of patients in clinical trials, the Pharmaceutical Companies' receipt of necessary regulatory
approvals could be delayed or prevented.

 The Pharmaceutical Companies or their collaborators
may not be able to initiate or continue clinical trials for the Pharmaceutical Companies' product candidates if the Pharmaceutical
Companies or such collaborators are unable to locate and enroll a sufficient number of eligible patients to participate in these trials
as required by the FDA or analogous regulatory authorities outside the United States.

 Enrollment may be particularly challenging for
some of the orphan diseases the Pharmaceutical Companies target in the Pharmaceutical Companies' programs. In addition, there may
be limited patient pools from which to draw for clinical studies. In addition to the rarity of some diseases, the eligibility (inclusion
and exclusion) criteria of the Pharmaceutical Companies' clinical studies will further limit the pool of available study participants
as they may require that patients have specific characteristics that they can measure or to assure their disease is either severe enough
or not too advanced to include them in a study. In addition, some of the Pharmaceutical Companies' competitors may have approved
competing products or ongoing clinical trials for product candidates that are in development to treat the same indications as the Pharmaceutical
Companies' product candidates, and patients who would otherwise be eligible for the Pharmaceutical Companies' clinical trials
may instead be prescribed a competitor's approved product or advised to enroll in clinical trials of the Pharmaceutical Companies'
competitors' product candidates and therefore be ineligible or otherwise unwilling to enroll in the Pharmaceutical Companies'
clinical trials.

 Patient enrollment is also affected by other factors including:

 size and nature of the patient population;

 severity of the disease under investigation;

 availability and efficacy of approved
 drugs for the disease under investigation;

 patient eligibility (inclusion and
 exclusion) criteria for the trial in question as defined in the protocol;

 perceived risks and benefits of
 the product candidate under study;

 clinicians' and patients'
 perceptions as to the potential advantages of the product candidate being studied in relation
 to other available therapies, including any new products that may be approved or future product
 candidates being investigated for the indications the Pharmaceutical Companies are investigating;

 delays in or temporary suspension
 of the enrollment of patients in planned clinical trials due to the COVID-19 pandemic or
 other public health emergencies;

 ability to obtain and maintain patient
 consents and clinical trial enrollment;

 patient referral practices of physicians;

 the ability to monitor patients
 adequately during and after treatment;

 proximity and availability of clinical
 trial sites for prospective patients; and

 the risk that patients enrolled
 in clinical trials will drop out of the trials before completion, including as a result of
 contracting COVID-19 or other health conditions or being forced to quarantine, or, because
 they may be late-stage cancer patients or have other conditions and will not survive the
 full durations of the clinical trials.

 These factors may make it difficult for the Pharmaceutical
Companies to enroll enough patients to complete their clinical trials in a timely and cost-effective manner. The Pharmaceutical Companies'
inability to enroll a sufficient number of patients for their clinical trials would result in significant delays or may require them
to abandon one or more clinical trials altogether. Enrollment delays in clinical trials may result in increased development costs for
the Pharmaceutical Companies' product candidates and jeopardize their ability to obtain regulatory approval. Furthermore, even
if the Pharmaceutical Companies are able to enroll a sufficient number of patients for their clinical trials, they may have difficulty
maintaining participation in their clinical trials through the treatment and any follow-up periods.

 Our or the Pharmaceutical Companies'
product candidates may cause significant adverse events, toxicities or other undesirable side effects when used alone or in combination
with other approved products or investigational new drugs that may result in a safety profile that could preclude further development,
prevent regulatory approval, prevent market acceptance or limit their commercial potential if regulatory approval were to be received
or result in significant negative consequences.

 If our or the Pharmaceutical Companies'
product candidates are associated with undesirable side effects or have unexpected characteristics in preclinical studies or clinical
trials when used alone or in combination with other approved products or investigational new drugs, we or the Pharmaceutical Companies
may need to interrupt, delay or abandon their development or limit development to more narrow uses or subpopulations in which the undesirable
side effects or other characteristics are less prevalent, less severe or more acceptable from a risk-benefit perspective. Treatment-related
side effects could also affect patient recruitment or the ability of enrolled patients to complete the trial or result in potential product
liability claims. Any of these occurrences may prevent us or the Pharmaceutical Companies from securing regulatory approval or achieving
or maintaining market acceptance of the affected product candidate if it were to received regulatory approval, and may adversely affect
our business, financial condition, and prospects significantly.

 In addition, many compounds that initially showed
promise in early-stage testing have later been found to cause side effects that prevented further development of the compound. Further,
we expect that certain product candidates will be used in patients that have weakened immune systems, which may exacerbate any potential
side effects associated with their use. Patients treated with product candidates may also be undergoing surgical, radiation and/or chemotherapy
treatments, which can cause side effects or adverse events that are unrelated to the product candidate but may still impact the risk-benefit
profile of the product candidate and the success of clinical trials. The inclusion of critically ill patients in clinical trials may
result in deaths or other adverse medical events due to other therapies or medications that such patients may be using or due to the
gravity of such patients' illnesses. It may be very challenging, or even impossible, for us or the Pharmaceutical Companies to
demonstrate that any such deaths or other adverse events are traceable to other therapies or medications that such patients may be using
or to the gravity of such patients' illnesses, in which case the FDA or analogous regulatory authorities may attribute any such
deaths or other adverse events to our or the Pharmaceutical Companies' product candidate being studied in the clinical trial.

 If significant adverse events or other side effects
are observed in any of our or the Pharmaceutical Companies' current or future clinical trials, we or the Pharmaceutical Companies
may have difficulty recruiting patients to the clinical trials, patients may drop out of such trials, or they may be required to abandon
the trials or their development efforts of a product candidate altogether. We, the Pharmaceutical Companies, the FDA, other comparable
regulatory authorities or an IRB may suspend or halt clinical trials of a product candidate at any time for various reasons, including
a belief that subjects in such trials are being exposed to inadequate clinical benefit and/or unacceptable health risks or adverse side
effects.

 Further, if any of our or the Pharmaceutical
Companies' product candidates obtains regulatory approval, toxicities associated with such product candidates previously not seen
during clinical testing may also develop after any such approval and lead to a number of potentially significant negative consequences,
including, but not limited to:

 regulatory authorities may suspend,
 limit or withdraw approvals of such product, or seek an injunction against its manufacture
 or distribution;

 regulatory authorities may require
 additional warnings on the label, including "boxed" warnings, or issue safety
 alerts, Dear Healthcare Provider letters, press releases or other communications containing
 warnings or other safety information about the product;

 we or the Pharmaceutical Companies
 may be required to change the way the product is administered or conduct additional clinical
 trials or post-approval studies;

 we or the Pharmaceutical Companies
 may be required to develop and implement a risk evaluation and mitigation strategy, or REMS,
 which could include, among other things, a medication guide outlining the risks of such side
 effects for distribution to patients, and potentially limitations or even restrictions on
 prescribing, dispensing, and/or distribution;

 we and/or the Pharmaceutical Companies
 may be subject to fines, injunctions or the imposition of criminal penalties;

 we and/or the Pharmaceutical Companies
 could be sued and held liable for harm caused to patients; and

 our reputation may suffer.

 Any of these events could prevent us or the Pharmaceutical
Companies from achieving or maintaining market acceptance of the particular product candidate, if approved, could significantly harm
the standing and reputation of the Pharmaceutical Companies among health-care providers and patients, and could seriously harm our business.

 Interim, "top-line," and preliminary
data from clinical trials that we announce or publish from time to time may have limited clinical significance, if any, and may change
as more patient data become available and are subject to audit and verification procedures that could result in material changes in the
final data.

 From time to time, we and/or the Pharmaceutical
Companies may publicly disclose preliminary or top-line data from preclinical studies and clinical trials, which is based on a preliminary
analysis of then-available data, and the results and related findings and conclusions are subject to change following study completion
and a more comprehensive review of the data related to the particular study or trial. We and/or the Pharmaceutical Companies may also
make assumptions, estimations, calculations and conclusions as part of our analyses of data, and we or they may not have received or
had the opportunity to fully and carefully evaluate all data. As a result, the top-line or preliminary results reported may differ significantly
from future results of the same studies, or different conclusions or considerations may qualify such results and/or limit the clinical
significance and clinical conclusions that can be drawn from them, once additional data have been received and fully evaluated. Top-line
data also remain subject to audit and verification procedures that may result in the final data being materially different from the preliminary
data we previously published. Even complete data from an individual study or clinical trial may be evaluated different and result in
different conclusions based upon subsequent data from a subsequently completed study. In addition, the full study results from all clinical
trials are subject to FDA review, and the FDA may draw materially different conclusions than those reached by us or the Pharmaceutical
Companies. As a result, top-line data should be viewed with caution until the final data are available, and then, until the full study
results have been completely evaluated by the FDA.

 From time to time, we and/or the Pharmaceutical
Companies may also disclose interim data from preclinical studies and clinical trials. Interim data from preclinical and clinical trials
are subject to the risk that one or more of the preclinical or clinical outcomes may not be clinically relevant and may materially change
as patient enrollment continues and more patient data become available or as patients from such clinical trials continue other treatments
for their disease. Adverse differences between preliminary or interim data and final data could materially adversely affect our business
prospects.

 Further, others, including regulatory agencies,
may not accept or agree with our or the Pharmaceutical Companies' assumptions, estimates, calculations, conclusions or analyses
or may interpret or weigh the importance of data differently, which could impact the value of the particular program, the approvability
or commercialization of the particular product candidate or product and our company in general. In addition, the information we or they
choose to publicly disclose regarding a particular study or clinical trial is based on what is typically extensive information, and you
or others may not agree with what we determine is material or otherwise appropriate information to include in our disclosure. If the
interim, top-line, or preliminary data that we or the Pharmaceutical Companies report differ from actual results, or if others, including
regulatory authorities, disagree with the conclusions reached, the Pharmaceutical Companies' ability to obtain approval for, and
commercialize, their product candidates may be adversely affected, which could materially adversely affect our business, financial condition
and results of operations.

 Results of preclinical studies and early
clinical trials may not be predictive of results of future preclinical studies or clinical trials.

 The outcome of preclinical studies and early
clinical trials may not be predictive of the success or failure of later preclinical studies or clinical trials, and interim results
of preclinical studies or clinical trials do not necessarily predict success in future clinical trials. Many companies in the biopharmaceutical
industry, including Cornerstone, have suffered significant setbacks in late-stage clinical trials after achieving positive results in
earlier development, and the Pharmaceutical Companies could face similar setbacks. The design of a clinical trial can determine whether
its results will support approval of a product, and flaws in the design of a clinical trial may not become apparent until the clinical
trial is well advanced or even completed. We and the Pharmaceutical Companies have limited experience in designing clinical trials and
may be unable to design and execute clinical trials to support regulatory approval. In addition, preclinical and clinical data are often
susceptible to varying interpretations and analyses. Many companies that believed their product candidates performed satisfactorily in
preclinical studies and clinical trials have nonetheless failed to obtain regulatory approval for the product candidates. Even if we
or the Pharmaceutical Companies, or future collaborators, believe that the results of clinical trials for the Pharmaceutical Companies'
product candidates warrant regulatory approval, the FDA or comparable foreign regulatory authorities may disagree and may not grant regulatory
approval of the Pharmaceutical Companies' product candidates.

 In some instances, there can be significant variability
in safety or efficacy results between different clinical trials of the same product candidate due to numerous factors, including changes
in trial procedures set forth in protocols, proper implementation of inclusion and exclusion criteria, differences in standards of care
in different geographical locations, differences in the size and type of the patient populations, changes in and adherence to the dosing
regimen and other elements of the clinical trial protocols, and the rate of dropout among clinical trial participants. If the Pharmaceutical
Companies fail to receive positive results in clinical trials of the Pharmaceutical Companies' product candidates, the development
timeline and regulatory approval and commercialization prospects for the Pharmaceutical Companies' most advanced product candidates,
and, correspondingly, our or the Pharmaceutical Companies' business and financial prospects would be negatively impacted.

 The regulatory approval processes of the
FDA and comparable foreign regulatory authorities are lengthy, time consuming and inherently unpredictable, and if the Pharmaceutical
Companies are ultimately unable to obtain regulatory approval for their product candidates, our and their business will be substantially
harmed.

 The time required to obtain approval by the FDA
and comparable foreign authorities is unpredictable but typically takes many years following the commencement of clinical trials and
depends upon numerous factors, including the substantial discretion of the regulatory authorities. In addition, approval policies, regulations,
or the type and amount of clinical data necessary to gain approval may change during the course of a product candidate's clinical
development and may vary among jurisdictions. We and the Pharmaceutical Companies have not obtained regulatory approval for any product
candidate, and it is possible that any product candidates they may seek to develop in the future will never obtain regulatory approval.
Neither we nor the Pharmaceutical Companies nor any future collaborator is permitted to market any new drug in the United States or abroad
until they receive regulatory approval of an NDA, or other comparable submission, from the FDA or foreign regulatory agencies.

 Prior to obtaining approval to commercialize
a product candidate in the United States or abroad, the Pharmaceutical Companies or their collaborators must demonstrate with substantial
evidence from, among other things, well-controlled clinical trials, and to the satisfaction of the FDA or foreign regulatory agencies,
that such product candidates are safe and effective for their intended use(s). Results from nonclinical and preclinical studies and clinical
trials can be interpreted in different ways. Even if we believe the nonclinical and preclinical or clinical data for the Pharmaceutical
Companies' product candidates are promising, such data may not be sufficient to support approval by the FDA and other regulatory
authorities. The FDA or foreign regulatory agencies may also require the Pharmaceutical Companies to conduct additional preclinical studies
or clinical trials for their product candidates either prior to or post-approval, or they may object to elements of a proposed clinical
development program.

 The FDA or any foreign regulatory authorities
can delay, limit or deny approval of the Pharmaceutical Companies' product candidates or require them to conduct additional nonclinical
and preclinical or clinical testing or abandon a program for multiple reasons in their sole discretion, including the following:

 the FDA or comparable foreign regulatory
 authorities may disagree with the design or implementation of clinical trials;

 the Pharmaceutical Companies may
 be unable to demonstrate to the satisfaction of the FDA or comparable foreign regulatory
 authorities that a product candidate is safe and effective for its proposed indication(s);

 the results of clinical trials may
 not meet the level of statistical significance required by the FDA or comparable foreign
 regulatory authorities for approval;

 serious and unexpected drug-related
 side effects experienced by participants in clinical trials or by individuals using drugs
 similar to the Pharmaceutical Companies' product candidates may result in negative
 regulatory conclusions regarding a product candidate's safety profile;

 the Pharmaceutical Companies may
 be unable to demonstrate that a product candidate's clinical and other benefits outweigh
 its safety risks;

 the FDA or comparable foreign regulatory
 authorities may disagree with the Pharmaceutical Companies' interpretation of data
 from preclinical studies or clinical trials;

 the data collected from clinical
 trials of the Pharmaceutical Companies' product candidates may not be acceptable or
 sufficient to support the submission of a NDA or other comparable submission or to obtain
 regulatory approval in the United States or elsewhere, and the Pharmaceutical Companies may
 be required to conduct additional clinical studies;

 the FDA or the applicable foreign
 regulatory authority may disagree regarding the formulation, labeling, manufacturing, and/or
 the specifications of the Pharmaceutical Companies' product candidates;

 the FDA or comparable foreign regulatory
 authorities may fail to approve the manufacturing processes or facilities of third-party
 manufacturers with which the Pharmaceutical Companies contract for clinical and commercial
 supplies; and

 the approval policies or regulations
 of the FDA or comparable foreign regulatory authorities may significantly change in a manner
 rendering clinical data insufficient for approval.

 Of the large number of drugs in development,
only a small percentage successfully complete the FDA or foreign regulatory approval processes and are commercialized. The lengthy approval
process as well as the unpredictability of future clinical trial results may result in the Pharmaceutical Companies failing to obtain
regulatory approval to market their product candidates, which would significantly harm our business, results of operations and prospects.
In addition, even if the Pharmaceutical Companies were to obtain approval, regulatory authorities may approve any of their product candidates
for fewer or more limited indications or less advantageous labeling than requested, may grant approval contingent on the performance
of costly post-marketing clinical trials, including Phase 4 clinical trials, and/or the implementation of a REMS, which may be required
to assure safe use of the drug after approval. The FDA or the applicable foreign regulatory authority also may approve a product candidate
for a more limited indication or patient population than originally requested, or may approve a product candidate with a label that does
not include the labeling claims necessary or desirable for the successful commercialization of that product candidate. Even if regulatory
approval were to be secured, payors in the US responsible for coverage and reimbursement determinations and foreign authorities responsible
for drug pricing determinations may not provide adequate coverage or reimbursement or approve the prices the Pharmaceutical Companies
intend to charge for any approved products or those prices could be reduced based upon most-favored-nation pricing policies. Any of the
foregoing scenarios could materially harm the commercial prospects for the Pharmaceutical Companies' product candidates.

 If the FDA does not conclude that certain
of the Pharmaceutical Companies' product candidates, if any, satisfy the requirements for the Section 505(b)(2) regulatory approval
pathway, or if the requirements for such product candidates under Section 505(b)(2) are not as they expect, the approval pathway for
those product candidates will likely take significantly longer, cost significantly more and entail significantly greater complications
and risks than anticipated, and in either case may not be successful.

 The Pharmaceutical Companies may develop product
candidates for which they plan to seek approval under the 505(b)(2) regulatory pathway in the United States. For example, LipoMedix may
ultimately seek FDA approval of Promitil through the 505(b)(2) pathway.

 The Drug Price Competition and Patent Term Restoration
Act of 1984, also known as the Hatch-Waxman Act, added Section 505(b)(2) to the FFDCA. Section 505(b)(2) of the FFDCA permits the submission
of an NDA where at least some of the information required for approval comes from studies that were not conducted by or for the applicant
and for which the applicant has not obtained a right of reference. Section 505(b)(2), when applicable under the FFDCA, would allow an
NDA submitted to the FDA to rely in part on data in the public domain and the FDA's prior conclusions regarding the safety and
effectiveness of a previously-approved product, which could expedite the development program for certain of the Pharmaceutical Companies'
product candidates by potentially decreasing the amount of nonclinical and preclinical and/or clinical data that they would need to generate
in order to obtain FDA approval.

 If the FDA does not allow any of the Pharmaceutical
Companies' product candidates to pursue approval under the Section 505(b)(2) regulatory pathway as anticipated, the Pharmaceutical
Companies may need to conduct additional nonclinical and preclinical studies and/or clinical trials, provide additional data and information,
and meet additional standards for regulatory approval. If this were to occur, the time and financial resources required to obtain FDA
approval for such product candidates, and complications and risks associated with such product candidates, would likely substantially
increase. Moreover, inability to pursue approval under the Section 505(b)(2) regulatory pathway could result in new competitive products
reaching the market more quickly than any product candidates the Pharmaceutical Companies are developing, which could adversely impact
our and their competitive position and prospects. Even if the Pharmaceutical Companies are allowed to pursue approval under the Section
505(b)(2) regulatory pathway, we cannot assure you that any product candidates the Pharmaceutical Companies develop will receive the
requisite approval for commercialization.

 In addition, notwithstanding the approval of
a number of products by the FDA under Section 505(b)(2), certain pharmaceutical companies and others have objected to the FDA's
interpretation of Section 505(b)(2). If the FDA's interpretation of Section 505(b)(2) is successfully challenged, either generally
or in connection with a Section 505(b)(2) submission by the Pharmaceutical Companies, the FDA may change its 505(b)(2) policies and practices,
which could delay or even prevent the FDA from approving any NDA that the Pharmaceutical Companies submit under Section 505(b)(2). In
addition, the pharmaceutical industry is highly competitive, and Section 505(b)(2) NDAs are subject to certain requirements designed
to protect the patent rights of sponsors of previously approved drugs that are referenced in a Section 505(b)(2) NDA. These requirements
may give rise to patent litigation and mandatory delays in approval of the Pharmaceutical Companies NDAs for up to 30 months or longer
depending on the outcome of any litigation. It also is not uncommon for a manufacturer of a previously approved product to file a citizen
petition with the FDA seeking to delay approval of, or impose additional approval requirements for, pending competing products. If successful,
such petitions can significantly delay, or even prevent, the approval of a new product. Even if the FDA ultimately denies such a petition,
the FDA may substantially delay approval while it considers and responds to the petition. In addition, even if the Pharmaceutical Companies
are able to utilize the Section 505(b)(2) regulatory pathway, there is no guarantee this would ultimately lead to streamlined product
development or earlier approval.

 We and the Pharmaceutical Companies may
not be able to obtain orphan drug designation or obtain or maintain the benefits associated with orphan drug designation, such as orphan
drug exclusivity and, even if they do, that exclusivity may not prevent the FDA or other comparable foreign regulatory authorities from
approving competing products.

 As part of our business strategy, we and the
Pharmaceutical Companies may seek orphan drug designation, or ODD, for any eligible product candidates, but we may be unsuccessful in
obtaining or maintaining the benefits of such designations.

 Regulatory authorities in some jurisdictions,
including the United States, may designate drugs for relatively small patient populations as orphan drugs. Under the Orphan Drug Act,
the FDA may designate a product as an orphan drug if it is a drug intended to treat a rare disease or condition, which is generally defined
as a patient population of fewer than 200,000 individuals annually in the United States, or a patient population greater than 200,000
in the United States where there is no reasonable expectation that the cost of developing and making available the drug will be recovered
from sales in the United States. Cornerstone has received ODD for CPI-613 (devimistat) for the treatment of pancreatic cancer, acute
myeloid leukemia, myelodysplastic syndrome, Burkitt's lymphoma, peripheral T-cell lymphoma, soft tissue sarcoma, and biliary cancer.
Cyclo received ODD for the treatment of NPC1 by the FDA for Trappsol Cyclo.

 In the United States, ODD entitles a party to
financial incentives such as opportunities for grant funding towards clinical trial costs, tax advantages and user-fee waivers. In addition,
if a product that has ODD subsequently receives the first FDA approval for a particular active ingredient for the rare disease for which
it has such designation, the product is entitled to orphan drug exclusivity for that active ingredient for that rare disease. Orphan
drug exclusivity in the United States provides that the FDA may not approve any other applications, including a full NDA or other comparable
submission, to market the same drug for the same indication for seven years, except in limited circumstances such as a showing of clinical
superiority to the product with orphan product exclusivity, or if the FDA withdraws exclusive approval or revokes orphan drug designation,
or if the marketing application (NDA or BLA) for the orphan drug is withdrawn for any reason, or if the FDA finds that the holder of
the orphan exclusivity has not shown that it can ensure the availability of sufficient quantities of the orphan product to meet the needs
of patients with the disease or condition for which the product was designated.

 Even if we or the Pharmaceutical Companies obtain
ODD for a product candidate, we may not be able to obtain or maintain orphan drug exclusivity for that product candidate. We or the Pharmaceutical
Companies may not be the first to obtain regulatory approval of any product candidate for which we have obtained ODD for the orphan-designated
indication due to the uncertainties associated with developing pharmaceutical products. If one or more third-party sponsor is the first
to receive approval for an alternative product(s) for the same orphan-designated indication as our or the Pharmaceutical Companies'
product candidate, even if FDA were to conclude that the Pharmaceutical Companies' product candidate is not the "same drug"
as the alternative product(s), the prior approval(s) of such alternative product(s) could result in a delay in the regulatory review
of our or the Pharmaceutical Companies' product candidate and/or requests for the conduct of additional clinical trials that may
further delay the prospects for any approval of our or the Pharmaceutical Companies' product candidate. In addition, exclusive
marketing rights in the United States may be limited if our or the Pharmaceutical Companies seek approval for an indication broader than
the orphan-designated indication or may be lost if the FDA later determines that the request for designation was materially defective
or if they are unable to ensure that we will be able to manufacture sufficient quantities of the product to meet the needs of patients
with the rare disease or condition.

 Further, even if we or the Pharmaceutical Companies
obtain orphan drug exclusivity for a product, that exclusivity may not effectively protect the product from competition because different
drugs with different active ingredients may be approved for the same condition, and competitors also potentially could secure approval
of the same drug for different non-orphan conditions. Even after an orphan drug is approved, the FDA can subsequently approve the same
drug for the same condition if the FDA concludes that the later drug is clinically superior in that it is shown to be safer, more effective
or makes a major contribution to patient care or the manufacturer of the product with orphan exclusivity is unable to maintain sufficient
product quantity. Orphan drug designation neither shortens the development time or regulatory review time of a drug nor gives the product
candidate any advantage in the regulatory review or approval process.

 Disruptions at the FDA and other government
agencies caused by funding shortages, government shutdowns or global health concerns could hinder their ability to hire, retain or deploy
key leadership and other personnel, or otherwise prevent new or modified products from being developed, approved or commercialized in
a timely manner or at all, which could negatively impact our business.

 The ability of the FDA to review and approve
new products can be affected by a variety of factors, including government budget and funding levels, statutory, regulatory and policy
changes, the FDA's ability to hire and retain key personnel and accept the payment of user fees, and other events that may otherwise
affect the FDA's ability to perform routine functions, including a shutdown of the federal government. Average review times at
the FDA have fluctuated in recent years. In addition, government funding of other government agencies that fund research and development
activities is subject to the political process, which is inherently fluid and unpredictable. Disruptions at the FDA and other agencies
may also slow the time necessary for new drugs or modifications to approved drugs to be reviewed and/or approved by necessary government
agencies, which would adversely affect our business. For example, over the last several years, including for 35 days beginning on December
22, 2018, the United States federal government has shut down several times and certain regulatory agencies, such as the FDA, have had
to furlough critical FDA employees and stop critical activities. If the occasional U.S. government shutdowns are prolonged or other events
or conditions occur that prevent the FDA or other regulatory agencies from hiring and retaining personnel and conducting their regular
activities, it could significantly impact the ability of these agencies to timely review and process our regulatory submissions, which
could have a material adverse effect on our business.

 Even if we or the Pharmaceutical Companies
receive regulatory approval for any product candidate, they will be subject to ongoing regulatory obligations and continued regulatory
review, which may result in significant additional expense.

 Any regulatory approvals that we or the Pharmaceutical
Companies may receive for their product candidates will require the regular submission of reports to regulatory authorities and surveillance
to monitor the safety and efficacy of the product, may contain significant limitations related to use restrictions for specified age
groups or patient populations, warnings, precautions or contraindications, and may include burdensome post-approval study or risk management
requirements. For example, the FDA may require a REMS as a condition of approval of a product candidate, which could include requirements
for a medication guide, physician communication plans or additional elements to ensure safe use, such as restricted distribution methods,
patient registries, and other risk minimization tools. In addition, if the FDA or a comparable foreign regulatory authority approves
a product candidate, the manufacturing processes, labeling, packaging, distribution, adverse event reporting, storage, advertising, promotion,
import, export, and recordkeeping for us or the Pharmaceutical Companies' products will be subject to extensive and ongoing regulatory
requirements and associated personnel and financial commitments. These requirements include submissions of safety and other post-marketing
information and reports, maintenance of cGMP compliance at and registrations for all manufacturing facilities, as well as continued compliance
with cGCP requirements for any clinical trials that are ongoing or conducted post-approval. Manufacturers of approved products and their
facilities are subject to continual review and periodic, unannounced inspections by the FDA and other regulatory authorities for compliance
with cGMP regulations and standards. Later discovery of previously unknown problems with marketed products, including adverse events
of unanticipated severity or frequency, or with third-party manufacturers or manufacturing processes, or failure to comply with regulatory
requirements, may result in, among other things:

 restrictions on the marketing or
 manufacturing of our products, withdrawal of the product from the market or voluntary or
 mandatory product recalls;

 restrictions on product distribution
 or use, or requirements to conduct post-marketing studies or clinical trials;

 fines, restitutions, disgorgement
 of profits or revenue, warning letters, untitled letters or holds on clinical trials;

 refusal by the FDA to approve pending
 applications or supplements to approved applications filed by us or the Pharmaceutical Companies
 or suspension or revocation of approvals;

 product seizure or detention, or
 refusal to permit the import or export of our or the Pharmaceutical Companies' products;
 and

 injunctions or the imposition of
 civil or criminal penalties.

 The occurrence of any event or penalty described
above may inhibit our or the Pharmaceutical Companies' ability to commercialize their product candidates and generate revenue and
could require us or the Pharmaceutical Companies to expend significant time and resources in response and could generate negative publicity.

 The FDA's and other regulatory authorities'
policies may change, and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our
or the Pharmaceutical Companies' product candidates. We also cannot predict the likelihood, nature or extent of government regulation
that may arise from future legislation or administrative action, either in the United States or abroad. For example, the results of the
2024 United States Presidential Election impacted our business and industry. Namely, the Trump Administration took several Executive
Actions, including the issuance of a number of Executive Orders, that imposed significant burdens on, or otherwise materially delayed,
the FDA's ability to engage in routine oversight activities, such as implementing statutes through rulemaking, issuance of guidance,
and review and approval of marketing applications. It is difficult to predict whether or how these orders will be rescinded and replaced
under the current or future Administrations. The policies and priorities of any Administration and the U.S. Congress are unknown and
could materially impact the regulations governing our or the Pharmaceutical Companies' product candidates. If we or the Pharmaceutical
Companies are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we or
they are not able to maintain regulatory compliance, we or they may be subject to enforcement action and we or they may not achieve or
sustain profitability.

 The FDA and other regulatory agencies actively
enforce the laws and regulations prohibiting the promotion of off-label uses.

 If any of the Pharmaceutical Companies'
product candidates are approved and if they are found to have been improperly promoted for unapproved uses of those products, we and/or
the Pharmaceutical Companies may become subject to significant liability. The FDA and other regulatory agencies strictly regulate the
promotional claims that may be made about prescription products, such as the Pharmaceutical Companies' product candidates, if approved.
In particular, a product may not be promoted for uses or other conditions of labeling that are not approved by the FDA or such other
regulatory agencies as reflected in the product's approved labeling. If the Pharmaceutical Companies receive regulatory approval
for a product candidate, physicians may nevertheless prescribe it to their patients in a manner that is inconsistent with the approved
label. If we or the Pharmaceutical Companies are found to have promoted such unapproved, or off-label, uses, we or they may become subject
to significant liability. The U.S. federal government has levied large civil and criminal fines against companies for alleged improper
promotion of off-label use and has enjoined several companies from engaging in off-label promotion. The FDA has also requested that companies
enter into consent decrees or permanent injunctions under which specified promotional conduct is changed or curtailed. If we or the Pharmaceutical
Companies cannot successfully manage the promotion of their product candidates, if approved, we and/or they could become subject to significant
liability, which would materially adversely affect our business and financial condition.

 Even if any of our or the Pharmaceutical
Companies' product candidates receive regulatory approval, they may fail to achieve the degree of market acceptance by physicians,
patients, healthcare payors and others in the medical community necessary for commercial success.

 If any of our or the Pharmaceutical Companies'
product candidates receive regulatory approval, they may nonetheless fail to gain sufficient market acceptance by physicians, patients,
healthcare payors, and others in the medical community. If any of our or the Pharmaceutical Companies' product candidates were
to receive regulatory approval but do not achieve an adequate level of acceptance, we or the Pharmaceutical Companies may not generate
significant product revenue and may not become profitable. The degree of market acceptance of our or the Pharmaceutical Companies'
product candidates, if approved for commercial sale, will depend on a number of factors, including:

 the efficacy, safety profile, and
 any potential clinical advantages compared to alternative treatments;

 the approval, availability, market
 acceptance, and reimbursement for any companion diagnostic;

 the ability to offer our or the
 Pharmaceutical Companies' medicines for sale at competitive prices;

 convenience and ease of administration
 compared to alternative treatments;

 the willingness of the target patient
 population to try new therapies and of physicians to prescribe these therapies;

 ensuring uninterrupted product supply;

 the strength of marketing and distribution
 support;

 sufficient third-party coverage
 and reimbursement; and

 the prevalence and severity of any
 side effects.

 If any of our or the Pharmaceutical Companies'
product candidates are approved but do not achieve an adequate level of acceptance by physicians, hospitals, healthcare payors and patients,
they may not generate or derive sufficient revenue from that product candidate and our and their financial results could be negatively
impacted.

 We and the Pharmaceutical Companies are
dependent upon third parties for a variety of functions. These arrangements may not provide us with the benefits we expect.

 We and the Pharmaceutical Companies rely on third
parties to perform a variety of functions. We are party to numerous agreements that place substantial responsibility on clinical research
organizations, or CROs, contract manufacturing organizations, or CMOs, consultants, and other service providers for the development of
the Pharmaceutical Companies' product candidates. We also rely on medical and academic institutions to perform aspects of the Pharmaceutical
Companies' clinical trials of product candidates. In addition, an element of our research and development strategy has been to
in-license technology and product candidates from academic and government institutions in order to minimize or eliminate investments
in early research. We may not be able to enter new arrangements without undue delays or expenditures or on favorable terms, if at all,
and these arrangements may not allow us to compete successfully. Moreover, if third parties do not successfully carry out their contractual
duties, meet expected deadlines or conduct clinical trials in accordance with regulatory requirements or applicable protocols, the Pharmaceutical
Companies' product candidates may not be approved for marketing or such approval and commercialization may be delayed. If that
occurs, our collaborators will not be able, or may be delayed in their efforts, to seek regulatory approval for or commercialize the
Pharmaceutical Companies' product candidates.

 If, in the future, we or the Pharmaceutical
Companies are unable to establish sales and marketing capabilities or enter into agreements with third parties to sell and market our
or the Pharmaceutical Companies' product candidates that receive regulatory approval, if any, we or the Pharmaceutical Companies
may not be successful in commercializing the product candidates if and when they are approved.

 We and the Pharmaceutical Companies do not have
a sales or marketing infrastructure and have little experience in the sale, marketing or distribution of pharmaceutical products. To
achieve commercial success for any approved medicine for which we or the Pharmaceutical Companies retain sales and marketing responsibilities,
they must either develop a sales and marketing organization or outsource these functions to other third parties. In the future, we or
the Pharmaceutical Companies may choose to build a focused sales and marketing infrastructure to sell, or participate in sales activities
with our or their collaborators for, some of our or their product candidates if and when they are approved.

 There are risks involved with both establishing
one's own sales and marketing capabilities and entering into arrangements with third parties to perform these services. For example,
recruiting and training a sales force is expensive and time consuming and could delay any product launch. If the commercial launch of
a product candidate that has received regulatory approval for which we or the Pharmaceutical Companies recruit a sales force and establish
marketing capabilities is delayed or does not occur for any reason, they would have prematurely or unnecessarily incurred these commercialization
expenses. This may be costly, and our investment would be lost if we or the Pharmaceutical Companies cannot retain or reposition their
sales and marketing personnel.

 Factors that may inhibit us or the Pharmaceutical
Companies' efforts to commercialize their medicines on our or their own include:

 our or the Pharmaceutical Companies'
 inability to recruit and retain adequate numbers of effective sales and marketing personnel;

 the inability of sales personnel
 to obtain access to physicians or persuade adequate numbers of physicians to prescribe any
 future medicines in accordance with approved labeling;

 the lack of complementary medicines
 to be offered by sales personnel, which may put them at a competitive disadvantage relative
 to companies with more extensive product lines;

 our or the Pharmaceutical Companies'
 inability to equip medical and sales personnel with compliant and effective materials, including
 medical and sales literature, to help them educate physicians and other healthcare providers
 regarding applicable diseases and any products that receive regulatory approval;

 the failure of us or the Pharmaceutical
 Companies, and/or any other third parties to whom sales, marketing, reimbursement and distribution
 services are outsourced, to develop and distribute compliant medical and sales literature
 in accordance with any labeling that is approved or to adhere to the scope of such literature
 when communicating with physicians and other health care professionals regarding any products
 that receive regulatory approval;

 our or the Pharmaceutical Companies' inability to develop
 or obtain sufficient operational functions to support our commercial activities; and

 unforeseen costs and expenses associated
 with creating an independent sales and marketing organization.

 If we or the Pharmaceutical Companies enter into
arrangements with third parties to perform sales, marketing, reimbursement and distribution services, their product revenue or the profitability
of product revenue to them are likely to be lower than if we or the Pharmaceutical Companies were to directly market and sell any medicines
that we or they develop. In addition, we or the Pharmaceutical Companies may not be successful in entering into arrangements with third
parties to sell and market our or their product candidates or may be unable to do so on terms that are favorable. We and the Pharmaceutical
Companies likely will have little control over such third parties' allocation of resources, and any of them may fail to devote
the necessary resources and attention to sell and market our or the Pharmaceutical Companies' medicines effectively. If we or the
Pharmaceutical Companies do not establish sales and marketing capabilities successfully, either on their own or in collaboration with
third parties, we or the Pharmaceutical Companies will not be successful in commercializing our or their product candidates if and when
they are approved.

 We and Portfolio Companies face substantial
competition, and if competitors develop and market technologies or products more rapidly than those companies do or that are more effective,
safer or less expensive than the product candidates that those companies develop, our commercial opportunities will be negatively impacted.

 The biopharmaceutical industry is characterized
by rapidly advancing technologies, intense competition, and a strong emphasis on proprietary and novel products and product candidates.
The development and commercialization of new drug products is highly competitive. We and the Pharmaceutical Companies face competition
with respect to current product candidates, and we and the Pharmaceutical Companies and our and their collaborators will face competition
with respect to any product candidates that they or their collaborators may seek to develop or commercialize in the future, from major
pharmaceutical companies and specialty biopharmaceutical companies worldwide. There are a number of large biopharmaceutical companies
that currently market and sell products or are pursuing the development of products for the treatment of the disease indications for
which the Pharmaceutical Companies are developing their product candidates. Some of these competitive products and therapies are based
on scientific approaches that are similar to our or the Pharmaceutical Companies' approach. Potential competitors also include
academic institutions, government agencies, and other public and private research organizations that conduct research, seek patent protection,
and establish collaborative arrangements for research, development, manufacturing and commercialization.

 The Pharmaceutical Companies that are developing
their product candidates for the treatment of cancer may compete against a variety of available drug therapies marketed for cancer. In
many cases, these drugs are administered in combination to enhance efficacy, and cancer drugs are frequently prescribed off-label by
healthcare professionals based upon their independent medical judgement and expertise. Some of the currently approved drug therapies
are branded and subject to patent protection, and others are available on a generic or biosimilar basis. Many of these approved drugs
are well established therapies and are widely accepted by physicians, patients and third-party payors. Insurers and other third-party
payors may also encourage the use of generic products. The Pharmaceutical Companies expect that if their product candidates are approved,
they will be priced at a significant premium over competitive generic or biosimilar products. This may make it difficult for the Pharmaceutical
Companies to achieve their business strategy of using their product candidates in combination with existing therapies or replacing existing
therapies with their product candidates following any regulatory approvals.

 We are focused on a treatment for NPC1 and face
competition from Actelion, a subsidiary of Johnson & Johnson, Zevra Therapeutics, Inc., Mandos Health, Azafaros, and IntraBio, among
others.

 Cornerstone is focused on an area known as cancer
metabolism, and there are also a number of product candidates in preclinical or clinical development by third parties to treat cancer
by targeting cancer metabolism. These companies include large pharmaceutical companies, including, but not limited to, AstraZeneca plc,
Eli Lilly and Company, Roche Holdings Inc. and its subsidiary Genentech, Inc., GlaxoSmithKline plc, Merck & Co., Novartis, Pfizer,
Inc., Novo Nordisk, and Genzyme, a Sanofi company. There are also biotechnology companies of various sizes that are developing therapies
to target cancer metabolism, including, but not limited to, Sagiment Biosciences, Eleison Pharmaceuticals, BioMarin Pharmaceutical Inc.,
and Takeda.

 LipoMedix faces competition from, among others,
(i) other liposome and nanomedicine products in solid tumors (for example, Doxil (Janssen), Onivyde (Ipsen), and Abraxane (Celgene));
(ii) other non-liposomal chemotherapeutic drugs in gastrointestinal malignancies recently developed or under development (for example,
TAS-102 (Taiho) in colorectal cancer); (iii) biological therapy (including small molecule kinase inhibitors) recently developed or under
development for colon cancer (for example, Regorafenib (Bayer)); (iv) immunotherapy approaches in gastrointestinal malignancies (for
example, Merck USA), antibodies and/or vaccinations; and (v) other companies such as Roche.

 We and the Pharmaceutical Companies' competitors
may develop products that are more effective, safer, more convenient or less costly than any that the Pharmaceutical Companies are developing
or that would render their product candidates obsolete or non-competitive. In addition, our or the Pharmaceutical Companies' competitors
may discover biomarkers that more efficiently and/or effectively measure metabolic pathways than the Pharmaceutical Companies'
methods, which may give them a competitive advantage in developing potential products. The Pharmaceutical Companies' competitors
may also obtain regulatory approval from the FDA or other regulatory authorities for their products more rapidly than the Pharmaceutical
Companies may obtain approval, which could result in the Pharmaceutical Companies' competitors establishing a strong market position
before they are able to enter the market.

 Many of the Pharmaceutical Companies' competitors
have significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing, conducting
clinical trials, obtaining regulatory approvals, and marketing approved products than the Pharmaceutical Companies do. Mergers and acquisitions
in the biopharmaceutical industry may result in even more resources being concentrated among a smaller number of the Pharmaceutical Companies'
competitors. Smaller and other clinical stage companies may also prove to be significant competitors, particularly through collaborative
arrangements with large and established companies and research institutes. These third parties compete with us and the Pharmaceutical
Companies in recruiting and retaining qualified scientific and management personnel, establishing clinical trial sites and patient registration
for clinical trials, as well as in acquiring technologies complementary to, or necessary for, the Pharmaceutical Companies' programs.

 Even if we or the Pharmaceutical Companies
or our collaborators are able to commercialize any product candidates, such products may become subject to unfavorable pricing regulations,
third-party coverage or reimbursement practices or healthcare reform initiatives, which would harm our and the Pharmaceutical Companies'
business.

 The commercial success of our or the Pharmaceutical
Companies' product candidates will depend substantially, both domestically and abroad, on the extent to which the costs of our
or the Pharmaceutical Companies' product candidates will be covered and paid for, following regulatory approval, if any, by third-party
payors, including government health administration authorities and private health coverage insurers. If coverage and reimbursement is
not available, or reimbursement is available only to limited levels, we or the Pharmaceutical Companies, or any future collaborators,
may not be able to successfully commercialize our or the Pharmaceutical Companies' product candidates in the event they receive
regulatory approval. Even if coverage is provided, the approved reimbursement amount or any mandated most-favored-nation pricing may
not be high enough to allow us, the Pharmaceutical Companies, or any future collaborators, to establish or maintain pricing sufficient
to realize a sufficient return on our or the Pharmaceutical Companies' investments. In the United States, no uniform policy of
coverage and reimbursement for products exists among third-party payors, and coverage and reimbursement for products can differ significantly
from payor to payor. As a result, the coverage determination process is often a time-consuming and costly process that will require us
or the Pharmaceutical Companies to provide scientific and clinical support for the use of their products to each payor separately, with
no assurance that coverage and adequate reimbursement will be applied consistently or obtained in the first instance.

 There is significant uncertainty related to third-party
payor coverage and reimbursement of newly approved drugs. Regulatory approvals, pricing, and reimbursement for new drug products vary
widely from country to country. Some countries require approval of the sale price of a drug before it can be marketed. In many countries,
the pricing review period begins after marketing or regulatory approval is granted. In some foreign markets, prescription pharmaceutical
pricing remains subject to continuing governmental control even after initial approval is granted and in the US may subject us and the
Pharmaceutical Companies or any future collaborators to most-favored-nation pricing. As a result, we, the Pharmaceutical Companies, or
any future collaborators, might obtain regulatory approval for a product in a particular country, but then be subject to price regulations
that delay commercial launch of the product, possibly for lengthy time periods, or subject to pricing determinations or mandates which
may negatively impact the revenue we or the Pharmaceutical Companies are able to generate from the sale of the product in that country.
Adverse pricing limitations may hinder our or the Pharmaceutical Companies' ability or the ability of any future collaborators
to recoup our or the Pharmaceutical Companies' or their investment in one or more product candidates, even if the Pharmaceutical
Companies' product candidates obtain regulatory approval.

 Patients who are provided medical treatment for
their conditions generally rely on third-party payors to reimburse all or part of the costs associated with their treatment. Therefore,
our or the Pharmaceutical Companies' ability, and the ability of any future collaborators, to commercialize any of our or the Pharmaceutical
Companies' product candidates will depend in part on the extent to which coverage and reimbursement for these products and related
treatments will be available from third-party payors. Third-party payors decide which medications they will cover and establish reimbursement
levels. The healthcare industry is acutely focused on cost containment, both in the United States and elsewhere. Government authorities
and other third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular medications,
and by introducing most-favored-nation and other pricing mandates, any one of which could affect our or the Pharmaceutical Companies'
ability or that of any future collaborators to sell our or the Pharmaceutical Companies' product candidates profitably following
regulatory approval. These payors may not view our or the Pharmaceutical Companies' products, if any, as cost-effective, and coverage
and reimbursement may not be available to our or the Pharmaceutical Companies' customers, or those of any future collaborators,
or may not be sufficient to allow our or the Pharmaceutical Companies' products, if any, to be marketed on a competitive basis.
Cost-control initiatives could cause us or require us, or any future collaborators, to decrease the price our or the Pharmaceutical Companies,
or they, might establish for products, which could result in lower than anticipated product revenue. If the prices for the Pharmaceutical
Companies' products, if any, decrease or if governmental and other third-party payors do not provide coverage or adequate reimbursement
or mandate lower prices, our and the Pharmaceutical Companies' prospects for revenue and profitability will suffer.

 There may also be delays in obtaining coverage
and reimbursement for newly approved drugs, and coverage may be more limited than the indications for which the drug is approved by the
FDA or comparable foreign regulatory authorities. Moreover, eligibility for reimbursement does not imply that any drug will be paid for
in all cases or at a rate that covers our or the Pharmaceutical Companies' costs, including research, development, manufacture,
sale, and distribution. Reimbursement rates may vary, by way of example, according to the use of the product and the clinical setting
in which it is used. Reimbursement rates may also be based on reimbursement levels already set for lower cost drugs or may be incorporated
into existing payments for other services.

 In addition, increasingly, third-party payors
are requiring higher levels of evidence of the benefits and clinical outcomes of new technologies and are challenging the prices charged
as are governments in the US and abroad. We and the Pharmaceutical Companies cannot be sure that coverage will be available for any product
candidate that they, or any future collaborator, commercializes and, if available, that the reimbursement rates will be adequate. Further,
the net reimbursement for drug products may be subject to additional reductions if there are changes to federal and/or state laws that
govern imports of drugs from countries such as Canada where they may be sold at lower prices than in the United States. An inability
to promptly obtain coverage and adequate reimbursement rates from both government-funded and private payors for our or any of the Pharmaceutical
Companies' product candidates for which they, or any future collaborator, obtain regulatory approval could significantly harm our
and the Pharmaceutical Companies' operating results, our and the Pharmaceutical Companies' ability to raise capital needed
to commercialize products, and our and the Pharmaceutical Companies' overall financial condition.

 Product liability lawsuits against us or
the Pharmaceutical Companies or our or their collaborators could cause substantial liabilities and could limit commercialization of any
medicines that the Pharmaceutical Companies or our or their collaborators may develop.

 We and the Pharmaceutical Companies and their
collaborators face an inherent risk of product liability exposure related to the testing of the Pharmaceutical Companies' product
candidates in human clinical trials and will face an even greater risk if the Pharmaceutical Companies commercially sell any medicines
that the Pharmaceutical Companies may develop that secure regulatory approval. If the Pharmaceutical Companies or us or their or our
collaborators cannot successfully defend ourselves or themselves against claims that the Pharmaceutical Companies' product candidates
or medicines caused injuries, the Pharmaceutical Companies and we could incur substantial liabilities. Regardless of merit or eventual
outcome, liability claims may result in:

 decreased demand for any product
 candidates or medicines that the Pharmaceutical Companies may develop;

 injury to the Pharmaceutical Companies'
 reputation and significant negative media attention;

 withdrawal of clinical trial participants;

 significant costs to defend the
 related litigation;

 substantial monetary awards to trial
 participants or patients;

 loss of revenue;

 reduced resources of the Pharmaceutical
 Companies' management to pursue the Pharmaceutical Companies' business strategy,
 and diverted time and attention from executing on that strategy; and

 the inability to commercialize any
 medicines that the Pharmaceutical Companies may develop.

 Although we and the Pharmaceutical Companies
plan to maintain product liability insurance coverage, it may not be adequate to cover all liabilities that the Pharmaceutical Companies
and we may incur. We anticipate that we and the Pharmaceutical Companies will need to increase our and their insurance coverage as they
continue to run clinical trials and if they successfully commercialize any medicine that receives regulatory approval. Insurance coverage
in this setting is increasingly expensive. We and/or the Pharmaceutical Companies may not be able to maintain insurance coverage at a
reasonable cost or in an amount adequate to satisfy any liability that may arise. In addition, if one of our or the Pharmaceutical Companies'
collaboration partners were to become subject to product liability claims or were unable to successfully defend themselves against such
claims, any such collaboration partner could be more likely to terminate such relationships and could potentially seek indemnification
from us and/or the Pharmaceutical Companies, and therefore substantially limit the commercial potential of our and/or the Pharmaceutical
Companies' products.

 If we or the Pharmaceutical Companies fail
to comply with environmental, health and safety laws and regulations, we or they could become subject to fines or penalties or incur
costs that could have a material adverse effect on the success of our or their businesses.

 We and the Pharmaceutical Companies are subject
to numerous environmental, health, and safety laws and regulations, including those governing laboratory procedures and the handling,
use, storage, treatment, and disposal of hazardous materials and wastes. The Pharmaceutical Companies' operations involve the use
of hazardous and flammable materials, including chemicals and biological and radioactive materials. The Pharmaceutical Companies'
operations also produce hazardous waste products. The Pharmaceutical Companies generally contract with other third parties for the disposal
of these materials and wastes. The Pharmaceutical Companies cannot eliminate the risk of contamination or injury from these materials.
In the event of contamination or injury resulting from their use of hazardous materials, the Pharmaceutical Companies could be held liable
for any resulting damages, and any liability could exceed their resources. The Pharmaceutical Companies also could incur significant
costs associated with civil or criminal fines and penalties.

 Although the Pharmaceutical Companies maintain
workers' compensation insurance to cover them for costs and expenses they may incur due to injuries to their employees resulting
from the use of hazardous materials, this insurance may not provide adequate coverage against potential liabilities. The Pharmaceutical
Companies may not maintain adequate insurance for environmental liability or toxic tort claims that may be asserted against them in connection
with their storage or disposal of biological, hazardous or radioactive materials.

 In addition, the Pharmaceutical Companies may
incur substantial costs in order to comply with current or future environmental, health and safety laws and regulations. These current
or future laws and regulations may impair the Pharmaceutical Companies' research, development or production efforts. Failure to
comply with these laws and regulations also may result in substantial fines, penalties or other sanctions.

 Current and future legislation may increase
the difficulty and cost for us and the Pharmaceutical Companies and any future collaborators to obtain regulatory approval of the Pharmaceutical
Companies' product candidates and affect the prices obtained.

 In the United States and some foreign jurisdictions,
there have been a number of legislative and regulatory changes and proposed changes regarding the healthcare system that could, among
other things, prevent or delay development and/or regulatory approval of the Pharmaceutical Companies' product candidates, restrict
or regulate post-approval activities and affect the Pharmaceutical Companies' ability, or the ability of any future collaborators,
to profitably sell any products for which the Pharmaceutical Companies, or they, obtain regulatory approval. We and the Pharmaceutical
Companies expect that current laws, as well as other healthcare reform measures that may be adopted in the future, may result in more
rigorous coverage and reimbursement criteria and additional downward pressure on the price that the Pharmaceutical Companies, or any
future collaborators, may receive for any approved products.

 For example, in March 2010, the Patient Protection
and Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act, or collectively the ACA, was signed
into law. Among the provisions of the ACA of potential importance to the Pharmaceutical Companies' business and the Pharmaceutical
Companies' product candidates are the following:

 an annual, non-deductible fee on
 any entity that manufactures or imports specified branded prescription drugs and biologic
 agents;

 an increase in the statutory minimum
 rebates a manufacturer must pay under the Medicaid Drug Rebate Program, or MDRP;

 a new methodology by which rebates
 owed by manufacturers under the MDRP are calculated for drugs that are inhaled, infused,
 instilled, implanted or injected;

 expansion of healthcare fraud and
 abuse laws, including the civil False Claims Act and the federal Anti-Kickback Statute, new
 government investigative powers and enhanced penalties for noncompliance;

 a new Medicare Part D coverage gap
 discount program, in which manufacturers must agree to now offer 70% point-of-sale discounts
 off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage
 gap period, as a condition for the manufacturer's outpatient drugs to be covered under
 Medicare Part D;

 extension of manufacturers'
 Medicaid rebate liability to individuals enrolled in Medicaid managed care organizations;

 expansion of eligibility criteria
 for Medicaid programs;

 expansion of the entities eligible
 for discounts under the Public Health Service pharmaceutical pricing program;

 new requirements to report certain
 financial arrangements with physicians and teaching hospitals for eventual publication;

 a new requirement to annually report
 drug samples that manufacturers and distributors provide to physicians for eventual publication;

 a new Patient-Centered Outcomes
 Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness
 research, along with funding for such research; and

 a Center for Medicare and Medicaid
 Innovation within CMS to test innovative payment and service delivery models.

 Since enactment of the ACA, there have been numerous
executive and legal challenges and Congressional actions to repeal and replace provisions of the law. On June 17, 2021, the U.S. Supreme
Court dismissed the most recent judicial challenge to the ACA brought by several states without specifically ruling on the constitutionality
of the ACA. Prior to the Supreme Court's decision, President Biden issued an Executive Order to initiate a special enrollment period
from February 15, 2021 through August 15, 2021 for purposes of obtaining health insurance coverage through the ACA marketplace. The Executive
Order also instructed certain governmental agencies to review and reconsider their existing policies and rules that limit access to healthcare,
including, among others, reexamining Medicaid demonstration projects and waiver programs that include work requirements, and policies
that create unnecessary barriers to obtaining access to health insurance coverage through Medicaid or the ACA. It is unclear how other
healthcare reform measures of the current or future Administrations or other efforts, if any, to challenge, repeal or replace the ACA,
will impact the Pharmaceutical Companies' businesses. Nor is it clear whether other legislative changes will be adopted, if any,
or how such changes would affect the demand for the Pharmaceutical Companies' products if they were to receive regulatory approval.

 In addition, other legislative changes have been
proposed and adopted since the ACA was enacted. On August 2, 2011, the U.S. Budget Control Act of 2011, among other things, included
aggregate reductions of Medicare payments to providers of 2% per fiscal year. These reductions went into effect on April 1, 2013 and,
due to subsequent legislative amendments to the statute, will remain in effect through 2030, with the exception of a temporary suspension
from May 1, 2020 through December 31, 2021, unless additional Congressional action is taken. Additionally, there has been increasing
legislative and enforcement interest in the United States with respect to drug pricing practices. Specifically, there has been heightened
governmental scrutiny of pharmaceutical pricing practices in light of the rising cost of prescription drugs and biologics. Such scrutiny
has resulted in several recent congressional inquiries and proposed and enacted federal and state legislation designed to, among other
things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient assistance programs,
and reform government program reimbursement methodologies for drug products. Among other things, such scrutiny has led to enactment of
a budget reconciliation measure known as the Inflation Reduction Act of 2022, or IRA, signed into law by President Biden on August 16,
2022, which makes wide-reaching changes to Medicare prescription drug coverage and more targeted changes to Medicaid, the State Children's
Health Insurance Coverage Program, or CHIP, and private health insurance, and which includes several provisions to lower prescription
drug costs for people with Medicare and reduce drug spending by the federal government. The prescription drug provisions included in
the IRA will, among other things:

 require the federal government to
 negotiate prices for certain drugs covered under Medicare Part B (physician-administered
 drugs) and Part D (retail prescription drugs), starting with 10 high-spending, single-source
 drugs for 2026 and increasing to 20 by 2029;

 require manufacturers that sell
 drugs used by Medicare beneficiaries through Parts B and D to pay rebates to Medicare if
 they increase drug prices faster than consumer inflation, beginning in 2023;

 cap out-of-pocket spending for Medicare
 Part D enrollees and make other Part D benefit design changes, beginning in 2024;

 expand eligibility for full benefits
 under the Medicare Part D Low-Income Subsidy Program, beginning in 2024; and

 further delay implementation of
 the Trump Administration's drug rebate rule, beginning in 2027.

 Pursuant to the IRA, the Centers for Medicare
& Medicaid Services (CMS) selected ten drugs covered under Medicare Part D for the first cycle of negotiations for initial price
applicability year 2026 and engaged in voluntary negotiations with the drug companies for the selected drugs. CMS negotiated prices for
10 drugs covered under Medicare Part D that will go into effect beginning January 1, 2026, based on negotiations and agreements reached
between CMS and participating drug companies. In August 2024, CMS announced discounts ranging from 38% to 79% based upon negotiated price
differences from the drugs' 2023 list price. On January 17, 2025, CMS announced the selection of 15 drugs covered under Medicare
Part D for the second cycle of negotiations (initial price applicability year 2027), based on total gross covered prescription drug costs
under Medicare Part D and other criteria as required by the law. On September 30, 2025, CMS issued final guidance for the third cycle
of negotiations for the Medicare Drug Price Negotiation Program which will occur in 2026 for initial price applicability year 2028, along
with additional information on CMS' support for manufacturer effectuation of negotiated maximum fair prices (MFPs) in initial price
applicability years 2026, 2027, and 2028. CMS expects to announce up to 15 additional drugs covered under Part D and/or payable under
Part B for potential negotiation by February 1, 2026, plus any additional drugs selected for the first cycle of renegotiation. Among
other policy refinements, this final CMS guidance also implements expanded protections for orphan drugs enacted in the Working Families
Tax Cuts Act (Public Law 119-21) by implementing changes to the Orphan Drug Exclusion in section 71203 of Public Law 119-21. Specifically,
CMS broadened the exclusions from negotiation for products designated by FDA as drugs for one or more rare diseases or conditions if
all approved indications are for one or more such rare diseases or conditions (rather than solely products designated by FDA as drugs
for one rare disease or condition and for which all approved indications are for such rare disease or condition). These enhanced protections
are designed to preserve critical incentives for rare disease research while maintaining negotiation eligibility when appropriate.

 It is unclear exactly how the results of the
2024 election will impact healthcare reform measures of the current Trump Administration or whether the Administration could impose other
reform efforts, including what, if any, impact such changes will have on our business. One step the Trump Administration already has
taken is the issuance, on May 12, 2025, of an Executive Order titled: "Delivering Most-Favored-Nation Prescription Drug Pricing
to American Patients". Among other steps, the Executive Order directs multiple federal agencies, including the U.S. Department
of Health and Human Services, or HHS, to take specific actions aimed at compelling drug manufacturers to lower drug prices in the United
States in a manner comparable with other "developed nations." HHS subsequently announced that the Department "expects
each [drug] manufacturer to commit to aligning [United States] pricing for all brand products across all markets that do not currently
have generic or biosimilar competition with the lowest price of a set of economic peer countries." HHS indicated that it will calculate
the most-favored-nation, or MFN, price as the lowest price in a country that is part of the Organisation for Economic Co-operation and
Development and that has a per capita gross domestic product (GDP) of at least 60% of the U.S. per capita GDP. In July 2025, President
Trump sent letters to leading pharmaceutical manufacturers outlining the steps they must take to bring down the prices of prescription
drugs in the US to match the lowest price offered in other developed nations. Should any of the Pharmaceutical Companies' products
be successfully developed and secure regulatory approval in the US and foreign countries, and if such MFN policies remain in effect at
that time or are reintroduced at a later date and are applied to any of the Pharmaceutical Companies' products that do secure regulatory
approval, if any, such MFN policies could have a material adverse effect on their and our business, results of operations, financial
condition and cash flows.

 At the state level, individual states are increasingly
aggressive in passing legislation and implementing regulations designed to control pharmaceutical, medical device, and biological product
pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access, marketing cost disclosure
and transparency measures, and, in some cases, encouraging importation of drugs from other countries and bulk purchasing. In addition,
regional healthcare authorities and individual hospitals are increasingly using bidding procedures to determine what pharmaceutical products
and which suppliers will be included in their prescription drug and other healthcare programs. These measures could reduce the ultimate
demand for the Pharmaceutical Companies' products, if approved, or put pressure on their product pricing. We expect that additional
state, federal and foreign healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal,
state and foreign governments will pay for healthcare products and services, which could result in reduced demand or lower pricing for
the Pharmaceutical Companies' product candidates, or additional pricing pressures.

 We expect that healthcare reform measures that
may be adopted in the future could have a material adverse effect on our and the Pharmaceutical Companies' industry generally and
on our or their ability to maintain or increase sales of any of the Pharmaceutical Companies' product candidates that are successfully
developed, receive regulatory approval, and are commercialized.

 Legislative and regulatory proposals have been
made to expand post-approval requirements and restrict sales and promotional activities for pharmaceutical products. We and the Pharmaceutical
Companies cannot be sure whether additional legislative changes will be enacted, or whether the FDA regulations, guidance or interpretations
will be changed, or what the impact of such changes on the regulatory approvals of our product candidates, if any, may be. In addition,
increased scrutiny by the U.S. Congress of the FDA's approval process may significantly delay or prevent regulatory approval, as
well as subject us to more stringent product labeling and post-marketing testing and other requirements.

 Additional Risks Related to our Medical
Device Business

 Rafael Medical Devices' device candidates
may cause significant adverse events, toxicities or other undesirable side effects when used alone or in combination with other approved
or cleared devices or investigational or approved drugs that may result in a safety profile that could prevent regulatory approval, prevent
market acceptance, limit their commercial potential, result in significant negative consequences, or potential product liability claims.

 If Rafael Medical Devices' device candidates
are associated with undesirable side effects or have unexpected characteristics in clinical trials, or while on the market following
regulatory approval, marketing, authorization, or clearance, when used alone or in combination with other approved or cleared devices
or in combination with investigational or approved drugs, Rafael Medical Devices may need to interrupt, delay or abandon their development
or marketing of any cleared device or limit development to more narrow uses or subpopulations in which the undesirable side effects or
other characteristics are less prevalent, less severe or more acceptable from a risk-benefit perspective. Treatment-related side effects
could also affect patient recruitment or the ability of enrolled patients to complete the trial or result in potential product liability
claims. Any of these occurrences may prevent Rafael Medical Devices from achieving or maintaining market acceptance of the affected device
candidate and may adversely affect Rafael Medical Devices' and our business, financial condition, and prospects significantly.

 In addition, many device candidates that may
show promise in early-stage testing may later be found to cause side effects that prevents further development of the device candidate.
If significant adverse events or other side effects are observed in any of Rafael Medical Devices' current or future clinical trials,
Rafael Medical Devices may have difficulty recruiting patients to the clinical trials, patients may drop out of such trials, or they
may be required to abandon the trials or their development efforts of a device candidate altogether. Rafael Medical Devices, the FDA,
other comparable regulatory authorities or an IRB or ethics committee may suspend clinical trials of a device candidate at any time for
various reasons, including a belief that subjects in such trials are being exposed to inadequate clinical benefit and/or unacceptable
health risks or adverse side effects.

 Further, for any of Rafael Medical Devices'
device candidates that obtains regulatory approval, marketing authorization or clearance, toxicities or other serious adverse events
associated with such device candidates previously not seen during clinical testing may also develop after such approval, marketing authorization,
or clearance and lead to a number of potentially significant negative consequences, including, but not limited to:

 Regulatory authorities may suspend,
 limit or withdraw approvals, marketing authorizations or clearances of such device, if any,
 or seek an injunction against its manufacture or distribution;

 regulatory authorities may require
 additional warnings on the label, including "boxed" warnings, or issue safety
 alerts, Dear Healthcare Provider letters, press releases or other communications containing
 warnings or other safety information about the product;

 Rafael Medical Devices may be required
 to change the way the device is implanted or other used or conduct additional clinical trials
 or post-approval studies;

 Rafael Medical Devices may be subject
 to fines, injunctions or the imposition of criminal penalties;

 we or Rafael Medical Devices could
 be sued and held liable for harm caused to patients; and

 Rafael Medical Devices and our reputation
 may suffer.

 Any of these events could prevent Rafael Medical
Devices from achieving or maintaining market acceptance of the particular device candidate, if approved, marketing authorized or cleared,
as well as that of future device candidates, and could seriously harm their and our business.

 Interim, "top-line" and preliminary
data from preclinical studies and clinical trials that Rafael Medical Devices announce or publish from time to time may change as more
patient data become available and are subject to audit and verification procedures that could result in material changes in the final
data.

 From time to time, we and/or Rafael Medical Devices
may publicly disclose preliminary or top-line data from preclinical studies and clinical trials, which is based on a preliminary analysis
of then-available data, and the results and related findings and conclusions are subject to change following study completion and a more
comprehensive review of the data related to the particular study or trial. We and/or Rafael Medical Devices may also make assumptions,
estimations, calculations, and conclusions as part of our analyses of data, and we or they may not have received or had the opportunity
to fully and carefully evaluate all data. As a result, the top-line or preliminary results reported may differ significantly from future
results of the same or future studies, or different conclusions or considerations may qualify such results and/or limit the clinical
significance and clinical conclusions that can be drawn from them, once additional data have been received and fully evaluated. Top-line
data also remain subject to audit and verification procedures that may result in the final data being materially different from the preliminary
data we and/or Rafael Medical Devices previously published. Even complete data from an individual study or clinical trial may be evaluated
differently and result in different conclusions based upon subsequent data from a subsequently completed study. In addition, the full
study results from all clinical trials are subject to FDA review, and the FDA may draw materially different conclusions than those reached
by us or Rafael Medical Devices. As a result, top-line data should be viewed with caution until the final data are available, and then,
until the full study results have been completely evaluated by the FDA.

 From time to time, we and/or Rafael Medical Devices
may also disclose interim data from preclinical studies or clinical trials. Interim data from preclinical studies and clinical trials
are subject to the risk that one or more of the preclinical or clinical outcomes may materially change as patient enrollment continues
and more patient data become available or as patients from such clinical trials continue other treatments for their condition. Adverse
differences between preliminary or interim data and final data could materially adversely affect our and Rafael Medical Devices'
business prospects.

 Further, others, including regulatory agencies,
may not accept or agree with our or Rafael Medical Devices' assumptions, estimates, calculations, conclusions or analyses or may
interpret or weigh the importance of data differently, which could impact the value of the particular device development program, the
approvability or commercialization of the particular device candidate or device, and our and Rafael Medical Devices' companies
in general. In addition, the information we or they choose to publicly disclose regarding a particular study or clinical trial is based
on what is typically extensive information, and you or others may not agree with what we determine is material or otherwise appropriate
information to include in our disclosure. If the interim, top-line, or preliminary data that we or Rafael Medical Devices report differs
from actual results, or if others, including regulatory authorities, disagree with the conclusions reached, Rafael Medical Devices'
ability to obtain approval, marketing authorization or clearance for, and commercialize, their device candidates may be adversely affected,
which could materially adversely affect our and Rafael Medical Devices' business, financial condition, and results of operations.

 Results of preclinical studies and early
clinical trials may not be predictive of results of future preclinical studies and clinical trials.

 The outcome of preclinical studies and early
clinical trials may not be predictive of the success or failure of later preclinical studies and clinical trials, and interim results
of preclinical studies and clinical trials do not necessarily predict success in future preclinical studies and clinical trials. Many
companies in the medical device industry have suffered significant setbacks in late-stage clinical trials after achieving positive results
in earlier development, and Rafael Medical Devices could face similar setbacks. The design of a clinical trial can determine whether
its results will support approval, marketing authorization or clearance of a device candidate, and flaws in the design of a clinical
trial may not become apparent until the clinical trial is well advanced or even completed. Rafael Medical Devices has limited experience
in designing clinical trials and may be unable to design and execute a clinical trial to support regulatory approval, marketing authorization
or clearance. In addition, clinical data are often susceptible to varying interpretations and analyses. Many medical device companies
that believed their device candidates performed satisfactorily in clinical trials have nonetheless failed to obtain regulatory approval,
marketing authorization or clearance for the device candidates. Even if Rafael Medical Devices, or future collaborators, believe that
the results of clinical trials for Rafael Medical Devices' device candidates warrant regulatory approval, marketing authorization
or clearance, the FDA or comparable foreign regulatory authorities may disagree and may not grant regulatory approval, marketing authorization
or clearance of Rafael Medical Devices' device candidates.

 In some instances, there can be significant variability
in safety or efficacy results between different clinical trials of the same device candidate due to numerous factors, including changes
in trial procedures set forth in protocols, proper implementation of inclusion and exclusion criteria, differences in standards of care
in different geographical locations, differences in the size and type of the patient populations, changes in and adherence to the treatment
regimen and other elements of the clinical trial protocol, and the rate of dropout among clinical trial participants. If Rafael Medical
Devices fails to receive positive results in clinical trials of Rafael Medical Devices' device candidates, the development timeline
and regulatory approval, marketing authorization or clearance and commercialization prospects for Rafael Medical Devices' most
advanced device candidates, and, correspondingly, our and Rafael Medical Devices' business and financial prospects, would be negatively
impacted.

 The regulatory approval, marketing authorization
and clearance processes of the FDA and comparable foreign regulatory authorities are lengthy, time consuming, and inherently unpredictable,
and if Rafael Medical Devices is ultimately unable to obtain regulatory approval or clearance for their device candidates, their business
will be substantially harmed.

 Before Rafael Medical Devices can market or sell
a new medical device or a new use of or a claim for or significant modification to any medical device that has received approval or clearance,
if any, in the United States, Rafael Medical Devices must obtain either clearance from the FDA under the 510(k) pathway, marketing authorization
in response to a De Novo request, or approval of a PMA, unless an exemption applies. In the 510(k) clearance process, the FDA must determine
that a proposed device is "substantially equivalent" to a legally-marketed predicate device. To be "substantially equivalent,"
the proposed device must have the same intended use as the predicate device, and either have the same technological characteristics as
the predicate device or have different technological characteristics and not raise different questions of safety or effectiveness than
the predicate device. If FDA determines that the device is "not substantially equivalent," the device is automatically designated
as a Class III device. The device sponsor then must either fulfill the more rigorous PMA requirements, or the sponsor can submit a De
Novo request seeking a risk-based classification determination for the device in accordance with the FDA's De Novo classification
process, which is a route to market for novel medical devices that are low to moderate risk and are not substantially equivalent to a
predicate device. A sponsor also can submit a De Novo classification request directly, without first submitting a 510(k), if the sponsor
determines that there is no legally marketed predicate device upon which to base a determination of substantial equivalence. In the PMA
process, the FDA must determine that a proposed device is safe and effective for its intended use based, in part, on extensive data,
including, but not limited to, technical, preclinical, clinical trial, manufacturing, and labeling data. The PMA process is typically
required for products that are deemed to pose the greatest risk, such as life-sustaining, life-supporting or implantable devices.

 The PMA approval, the De Novo classification,
and the 510(k) clearance process can be expensive, lengthy, and uncertain. The FDA's 510(k) clearance process usually takes from
three to twelve months, but can last longer, and the De Novo classification process generally can be comparable. The process of obtaining
a PMA is much more costly and uncertain than the 510(k) clearance and De Novo classification processes and generally takes from six to
eighteen months, or even longer, from the time the application is filed with the FDA. In addition, a PMA generally requires the performance
of one or more clinical trials. Despite the time, effort, and cost, we and Rafael Medical Devices cannot assure you that any particular
device candidate will be approved or cleared by the FDA. Any delay or failure to obtain necessary regulatory approvals, marketing authorizations,
or clearances could harm our and Rafael Medical Devices' business.

 Any modification to any 510(k)-cleared product,
if any, that would constitute a major change in its intended use, or any change that could significantly affect the safety or effectiveness
of any such device, would require Rafael Medical Devices to obtain a new 510(k) marketing clearance and may even, in some circumstances,
require the submission of a De Novo request or a PMA application, if the change raises complex or novel scientific issues or the product
has a new intended use. The FDA requires every manufacturer to make the determination regarding the need for a new 510(k) submission
in the first instance, but the FDA may review any manufacturer's decision. Rafael Medical Devices may make changes to a 510(k)-cleared
product, if any, in the future that Rafael Medical Devices may determine does not require a new 510(k) clearance, De Novo marketing authorization,
or PMA approval. If the FDA disagrees with Rafael Medical Devices' decision not to seek a new 510(k) clearance, De Novo marketing
authorization, or PMA approval for changes or modifications to any existing devices and requires new clearances, marketing authorizations,
or approvals, Rafael Medical Devices may be required to recall and stop marketing any products as modified, if any, which could require
Rafael Medical Devices to redesign its products, conduct clinical trials to support any modifications, and pay significant regulatory
fines or penalties. If there is any delay or failure in obtaining required clearances or approvals or if the FDA requires Rafael Medical
Devices to go through a lengthier, more rigorous examination for future device candidates or modifications to existing devices, if any,
than Rafael Medical Devices had expected, Rafael Medical Devices' ability to introduce new or enhanced devices in a timely manner
would be adversely affected, which in turn would result in delayed or no realization of revenue from such device enhancements or new
devices and could also result in substantial additional costs which could decrease Rafael Medical Devices' profitability.

 The FDA can delay, limit or deny approval, marketing
authorization or clearance of a device for many reasons, including:

 Rafael Medical Devices may not be
 able to demonstrate to the FDA's satisfaction that the device or modification is substantially
 equivalent to the proposed predicate device or safe and effective for its intended use;

 The data from Rafael Medical Devices'
 preclinical studies and clinical trials and other required studies, if any, may be insufficient
 to support approval, marketing authorization, or clearance, where required; and

 The manufacturing process or facilities
 that Rafael Medical Devices use may not meet applicable requirements.

 In addition, the FDA may change its approval,
marketing authorization and clearance policies, adopt additional regulations or revise existing regulations, or take other actions, which
may prevent or delay approval, marketing authorization, or clearance of Rafael Medical Devices' future device candidates or impact
Rafael Medical Devices' ability to modify approved, marketing authorized, or cleared devices, if any, on a timely basis. Even after
approval, marketing authorization, or clearance for Rafael Medical Devices' products is obtained, they and their products are subject
to extensive postmarket regulation by the FDA, including with respect to advertising, marketing, labeling, manufacturing, distribution,
import, export, and clinical evaluation.

 In addition, if Rafael Medical Devices initiates
a correction or removal for a device that receives approval, marketing authorization, or clearance, if any, issues a safety alert, or
undertakes a field action or recall to reduce a risk to health posed by any such device, Rafael Medical Devices may be required to submit
a report to the FDA, and in many cases, to other regulatory agencies. Such reports could lead to increased scrutiny by the FDA, other
comparable regulatory agencies, and Rafael Medical Devices' customers regarding the quality and safety of their devices, and to
negative publicity, including FDA alerts, press releases, or administrative or judicial actions. Furthermore, the submission of these
reports has been and could be used by competitors against Rafael Medical Devices in competitive situations and cause customers to delay
purchase decisions or cancel orders, which would harm their and our reputation and business.

 The FDA, state, and foreign regulatory authorities
have broad enforcement powers. Rafael Medical Devices' failure to comply with applicable regulatory requirements could result in
enforcement action by the FDA, state or foreign regulatory agencies, which may include any of the following sanctions:

 adverse publicity, warning letters,
 untitled letters, fines, injunctions, consent decrees, and civil penalties;

 repair, replacement, refunds, recalls,
 termination of manufacturing and/or distribution, administrative detention or seizures of
 a device(s) that receives approval, marketing authorization or clearance, if any;

 operating restrictions, partial
 suspension or total shutdown of production;

 customer notifications or repair,
 replacement or refunds;

 refusing Rafael Medical Devices'
 requests for 510(k) clearance, De Novo classification or PMA approvals or foreign regulatory
 approvals of new device candidates, new intended uses or modifications to existing devices,
 if any;

 withdrawals of current 510(k) clearances,
 De Novo classifications or PMAs or foreign regulatory approvals, resulting in prohibitions
 on sales of any Rafael Medical Devices' device(s) that receives approval, marketing
 authorization or clearance, if any;

 FDA refusal to issue certificates
 to foreign governments needed to export products for sale in other countries; and

 criminal prosecution.

 Any of these sanctions could also result in higher
than anticipated costs or lower than anticipated sales of any Rafael Medical Devices' device(s) that receives approval, marketing
authorization, or clearance and adversely affect their and our business, results of operations, and financial condition.

 Even if Rafael Medical Devices receives
regulatory approval, marketing authorization, or clearance for any device candidate, they will be subject to ongoing regulatory obligations
and continued regulatory review, which may result in significant additional expense

 The VECTR-Video Endoscopic Carpal Tunnel Release System and any other future regulatory approvals, marketing authorizations, or clearances
that Rafael Medical Devices may receive for their device candidates may require the submission of reports to regulatory authorities and
surveillance to monitor the safety and effectiveness of the medical device, may contain significant limitations related to use restrictions
for specified age groups or patient populations, warnings, precautions or contraindications, and may include burdensome post-approval
study requirements. If the FDA or a comparable foreign regulatory authority approves, issues a marketing authorization for, or clears
a device candidate, the manufacturing processes, labeling, packaging, distribution, adverse event reporting, storage, advertising, promotion,
import, export, and recordkeeping for Rafael Medical Devices' devices, if any, will be subject to extensive and ongoing regulatory
requirements. These requirements include submissions of safety and other post-marketing information and reports, maintenance of cGMP compliance
at and registrations for all manufacturing facilities, as well as continued compliance with cGCP requirements for any clinical trials
that are ongoing or conducted post-approval. Manufacturers of approved devices and their facilities are subject to continual review and
periodic, unannounced inspections by the FDA and other regulatory authorities for compliance with cGMP regulations and standards. Later
discovery of previously unknown problems with marketed devices, including adverse events of unanticipated severity or frequency, or with
third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may result in, among other things:

 restrictions on the marketing or
 manufacturing of any Rafael Medical Devices' device that receives approval, marketing
 authorization or clearance, if any, withdrawal of the device from the market or voluntary
 or mandatory device recalls;

 requirements to conduct post-marketing
 studies or clinical trials;

 fines, restitutions, disgorgement
 of profits or revenue, warning letters, untitled letters or holds on clinical trials;

 refusal by the FDA to approve or
 clear pending applications or supplements to approved, marketing authorized or cleared applications
 filed by Rafael Medical Devices or suspension or revocation of approvals, if any;

 product seizure or detention, or
 refusal to permit the import or export of Rafael Medical Devices' devices; and

 injunctions or the imposition of
 civil or criminal penalties.

 The occurrence of any event or penalty described
above may inhibit Rafael Medical Devices' ability to commercialize their device candidates and generate revenue and could require
Rafael Medical Devices to expend significant time and resources in response and could generate negative publicity.

 In addition, the FDA's and other regulatory
authorities' policies may change and additional government regulations may be enacted that could prevent, limit or delay regulatory
approval, marketing authorization, or clearance of Rafael Medical Devices' device candidates. We also cannot predict the likelihood,
nature or extent of government regulation that may arise from future legislation or administrative or executive action, either in the
United States or abroad. For example, the results of the 2020 United States Presidential Election impacted our business and industry.
Namely, the Trump Administration took several Executive Actions, including the issuance of a number of Executive Orders, that imposed
significant burdens on, or otherwise materially delayed, the FDA's ability to engage in routine oversight activities, such as implementing
statutes through rulemaking, issuance of guidance, and review and approval of applications seeking approval, marketing authorization,
or clearance of device candidates. It is difficult to predict whether or how these orders will be rescinded and replaced under the current
Trump Administration or future Administrations. The policies and priorities of any Administration and the U.S. Congress are unknown and
could materially impact the regulations governing Rafael Medical Devices' device candidates. If we or Rafael Medical Devices are
slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we or they are not
able to maintain regulatory compliance as a result of a changing regulatory landscape or otherwise, we or they may be subject to enforcement
action, may lose any regulatory approval(s), marketing authorization(s), or clearance(s) that we or they obtain, if any, or fail to obtain
new regulatory approvals, marketing authorizations, or clearances, and we and they may not be able to achieve or sustain profitability,
which would adversely affect our business, prospects, financial condition, and results of operations.

 Rafael Medical Devices is dependent upon
third parties for a variety of functions. These arrangements may not provide Rafael Medical Devices with the benefits they expect.

 Rafael Medical Devices relies on third parties
to perform a variety of functions. Rafael Medical Devices is party to numerous agreements that place substantial responsibility on clinical
research organizations, contract manufacturing organizations, consultants, and other service providers for the development of Rafael
Medical Devices' device candidates. Rafael Medical Devices also relies on medical and academic institutions to perform aspects
of its clinical trials of device candidates. In addition, an element of Rafael Medical Devices' research and development strategy
has been to in-license technology and device candidates from academic and government institutions in order to minimize or eliminate investments
in early research. Rafael Medical Devices may not be able to enter new arrangements without undue delays or expenditures or on favorable
terms, and these arrangements may not allow Rafael Medical Devices to compete successfully. Moreover, if third parties do not successfully
carry out their contractual duties, meet expected deadlines or conduct clinical trials in accordance with regulatory requirements or
applicable protocols, Rafael Medical Devices' device candidates may not be approved, receive marketing authorization, or be cleared
for marketing and commercialization or such approval, marketing authorization, or clearance may be delayed. If that occurs, Rafael Medical
Devices or its collaborators will not be able, or may be delayed in their efforts, to commercialize Rafael Medical Devices' device
candidates.

 Product liability lawsuits against Rafael
Medical Devices or their collaborators or us could cause substantial liabilities and could limit commercialization of any medical devices
that Rafael Medical Devices or their collaborators may develop.

 Rafael Medical Devices and their collaborators
and we face an inherent risk of product liability exposure related to the testing and manufacturing of Rafael Medical Devices'
device candidates in human clinical trials and will face an even greater risk if Rafael Medical Devices or they commercially sell any
medical devices that Rafael Medical Devices or they may develop that secure regulatory approval, marketing authorization, or clearance.
Rafael Medical Devices' device candidates are designed to affect, and any future devices will be designed to affect, important
bodily functions and processes. Any side effects, manufacturing defects, misuse or abuse associated with Rafael Medical Devices'
device candidates or devices could result in patient injury or death. The medical device industry has historically been subject to extensive
litigation over product liability claims, and we cannot assure you that we and Rafael Medical Devices will not face product liability
claims. We and Rafael Medical Devices may be subject to product liability claims if Rafael Medical Devices' device candidates or
devices cause, or merely appear to have caused, patient injury or death, even if such injury or death was as a result of supplies or
components that are produced by third-party suppliers. Product liability claims may be brought against us by consumers, healthcare providers
or others selling or otherwise coming into contact with Rafael Medical Devices' products, among others. If Rafael Medical Devices
or their collaborators, or we, cannot successfully defend themselves or ourselves against product liability claims that Rafael Medical
Devices' device candidates or devices caused injuries, Rafael Medical Devices and we could incur substantial liabilities and reputational
harm. Regardless of merit or eventual outcome, liability claims may result in:

 decreased demand for any device
 candidates or devices that Rafael Medical Devices may develop;

 injury to Rafael Medical Devices'
 reputation and significant negative media attention;

 withdrawal of clinical trial participants;

 significant costs to defend the
 related litigation;

 substantial monetary awards to trial
 participants or patients;

 loss of revenue;

 product recalls or withdrawals from
 the market;

 reduced resources of Rafael Medical
 Devices' management to pursue Rafael Medical Devices' business strategy, and
 diverted time and attention from executing on that strategy; and

 the inability to commercialize any
 devices that Rafael Medical Devices may successfully develop, if any.

 Although Rafael Medical Devices and we maintain
product liability insurance coverage that they and we believe is appropriate, this insurance is subject to deductibles and coverage limitations,
and it may not be adequate to cover all liabilities that Rafael Medical Devices may incur. Rafael Medical Devices' and our current
product liability insurance may not continue to be available to them or us on acceptable terms, if at all. If Rafael Medical Devices
or we are unable to obtain insurance at an acceptable cost or on acceptable terms or otherwise protect against potential product liability
claims, they or we could be exposed to significant liabilities. We anticipate that Rafael Medical Devices will need to increase their
insurance coverage as they continue to run clinical trials and if they successfully commercialize any device that receives regulatory
approval, marketing authorization, or clearance. Insurance coverage in this setting is increasingly expensive. Rafael Medical Devices
or we may not be able to maintain insurance coverage at a reasonable cost, if at all, or in an amount adequate to protect them or us
against any product liability claim that may arise. In addition, if one of Rafael Medical Devices' collaboration partners were
to become subject to product liability claims or were unable to successfully defend themselves against such claims, any such collaboration
partner could be more likely to terminate such relationships and could potentially seek indemnification from Rafael Medical Devices,
and therefore substantially limit the commercial potential of Rafael Medical Devices' device candidates. A product liability claim,
recall or other claim with respect to uninsured liabilities or for amounts in excess of insured liabilities could adversely affect our
and Rafael Medical Devices' business, results of operations, and financial condition.

 If Rafael Medical Devices fails to comply
with environmental, health and safety laws and regulations, they could become subject to fines or penalties or incur costs that could
have a material adverse effect on the success of their businesses.

 Rafael Medical Devices is subject to numerous
environmental, health, and safety laws and regulations, including those governing laboratory procedures and the handling, use, storage,
treatment and disposal of hazardous materials and wastes. Rafael Medical Devices' operations involve the use of hazardous materials,
including chemical materials. Rafael Medical Devices' operations also produce hazardous waste products. Rafael Medical Devices
generally contracts with third parties for the disposal of these materials and wastes. Rafael Medical Devices cannot eliminate the risk
of contamination or injury from these materials. In the event of contamination or injury resulting from their use of hazardous materials,
Rafael Medical Devices could be held liable for any resulting damages, and any liability could exceed their resources. Rafael Medical
Devices also could incur significant costs associated with civil or criminal fines and penalties.

 Although Rafael Medical Devices maintains workers'
compensation insurance to cover them for costs and expenses they may incur due to injuries to their employees resulting from the use
of hazardous materials, this insurance may not provide adequate coverage against potential liabilities. Rafael Medical Devices may not
maintain adequate insurance for environmental liability or toxic tort claims that may be asserted against them in connection with their
storage or disposal of hazardous materials.

 In addition, Rafael Medical Devices may incur
substantial costs in order to comply with current or future environmental, health and safety laws and regulations. These current or future
laws and regulations may impair Rafael Medical Devices' research, development or production efforts. Failure to comply with these
laws and regulations also may result in substantial fines, penalties or other sanctions.

 Risks Related to Reliance on Third Parties

 We and the Portfolio Companies currently
rely on, and plan to rely in the future on, third parties to conduct and support their nonclinical and preclinical studies and clinical
trials. If these third parties do not properly and successfully carry out their contractual duties or meet expected deadlines, the Portfolio
Companies may not be able to obtain regulatory approval of or commercialize their product candidates.

 We and the Portfolio Companies have utilized
and plan to continue to utilize and depend upon independent investigators and collaborators, such as medical institutions, CROs, CMOs,
and strategic partners to conduct and support their nonclinical and preclinical studies and clinical trials under written agreements.
We and the Portfolio Companies will generally have to negotiate budgets and contracts with CROs, trial sites, and CMOs, and they may
not be able to do so on favorable terms, if at all, which may result in delays to anticipated development timelines and increased costs.

 We expect that we and the Portfolio Companies
will rely heavily on these third parties over the course of their nonclinical and preclinical studies and clinical trials, and they will
control only certain aspects of their activities. As a result, we and the Portfolio Companies will have less direct control over resource
allocations and thus the conduct, timing, and completion of these nonclinical and preclinical studies and clinical trials and the management
of data developed through nonclinical and preclinical studies and clinical trials than would be the case if they were relying entirely
upon their own staff. Nevertheless, we and the Portfolio Companies are responsible for ensuring that each of their studies is conducted
in accordance with the applicable protocol, legal and regulatory requirements, and scientific standards, and our reliance on third parties
does not relieve us of our regulatory responsibilities. We and the Portfolio Companies and these third parties are required to comply
with cGLP and cGCP requirements, which are regulations and guidelines enforced by the FDA and comparable foreign regulatory authorities
for product candidates in clinical development. Regulatory authorities enforce these cGLP and cGCP requirements through periodic inspections,
both announced and unannounced, of trial sponsors, principal investigators, trial sites, and manufacturing sites, and the corresponding
books and records of such parties.

 If we, the Pharmaceutical Companies or Rafael
Medical Devices or any of these third parties fail to comply with applicable cGLP or cGCP regulations, the preclinical data generated
in their nonclinical and preclinical studies and/or the clinical data generated in their clinical trials may be deemed unreliable, and
the FDA or comparable foreign regulatory authorities may require them to repeat clinical trials and/or to perform additional nonclinical
and preclinical studies and/or clinical trials before approving any marketing applications. We cannot assure you that, upon inspection,
such regulatory authorities will determine that we or any of the Pharmaceutical Companies' or Rafael Medical Devices' nonclinical
and preclinical studies and/or clinical trials comply with the cGLP or cGCP regulations. In addition, such clinical trials must be conducted
with pharmaceutical product or a medical device produced under applicable cGMP and QSR regulations and will require a large number of
test patients. We, the Pharmaceutical Companies' or Rafael Medical Devices' failure or any failure by these third parties
to comply with these regulations or to recruit a sufficient number of patients may require them to repeat clinical trials and/or to perform
additional clinical studies, which would delay the regulatory approval process. Moreover, their and our business may be implicated if
any of these third parties violates federal or state fraud and abuse or false claims laws and regulations or healthcare privacy and security
laws.

 Any third parties conducting our, the Pharmaceutical
Companies' or Rafael Medical Devices' nonclinical and preclinical studies and clinical trials will not be their employees
and, except for remedies available to them under their agreements with such third parties, we or the Portfolio Companies cannot control
whether or not any third-party personnel will devote sufficient time and resources to our, the Pharmaceutical Companies' product
candidates or Rafael Medical Devices' device candidates. These third parties may also have relationships with other commercial
entities, including competitors, for whom they may also be conducting clinical trials or other product development activities, which
could affect their performance on our behalf. If these third parties do not successfully carry out their contractual duties or obligations
or meet expected deadlines, if they need to be replaced, or if the quality or accuracy of the nonclinical and preclinical and/or clinical
data they obtain is compromised due to the failure to adhere to nonclinical and preclinical or clinical protocols or regulatory requirements
or for other reasons, our, the Pharmaceutical Companies' and Rafael Medical Devices' nonclinical and preclinical studies
and clinical trials may be extended, delayed or terminated, and they may not be able to complete development of, obtain regulatory approval
of, or successfully commercialize their product candidates or device candidates. As a result, their and our financial results and commercial
prospects would be adversely affected, their and our costs could increase, and their and our ability to generate revenue could be delayed.

 We and the Portfolio Companies currently
rely and expect to rely in the future on the use of manufacturing suites in third-party facilities or on third parties to manufacture
our and the Portfolio Companies' product candidates and device candidates, and they may rely on third parties to produce and process
their products, if approved. Our and the Portfolio Companies' business could be adversely affected if we and they are unable to
use third-party manufacturing suites or if the third-party manufacturers fail to provide them with sufficient quantities of our product
candidates or device candidates or fail to do so in a cGMP-compliant manner, at acceptable quality levels or at acceptable prices.

 We and the Portfolio Companies do not currently
own any facility that may be used as a clinical-scale manufacturing and processing facility and must currently rely on outside vendors
to manufacture our, the Pharmaceutical Companies' product candidates and Rafael Medical Devices' device candidates. We and
the Portfolio Companies have not yet caused their product candidates or device candidates to be manufactured on a commercial scale and
may not be able to do so. We expect that we and the Portfolio Companies will need to negotiate and maintain contractual arrangements
with these outside vendors for the supply of their product candidates and device candidates, and they may not be able to do so on favorable
terms.

 The facilities used by contract manufacturers
to manufacture product candidates or approved products must also be approved by the FDA or other comparable foreign regulatory authorities
following inspections for any such approved products that generally will be conducted after we, the Pharmaceutical Companies or Rafael
Medical Devices submit an application to the FDA or other comparable foreign regulatory authorities. Such inspections also could occur,
for other products being manufactured by contract manufacturers, before we, the Pharmaceutical Companies or Rafael Medical Devices submit
an application to the FDA or other comparable foreign regulatory authorities, and any adverse regulatory findings from such inspections
could adversely impact a contract manufacturer's ability to be a contract manufacturer for us or the Portfolio Companies. We or
the Portfolio Companies may not directly control the manufacturing process of, and may be completely dependent on, contract manufacturing
partners for compliance with cGMP requirements and any other regulatory requirements of the FDA or other regulatory authorities for the
manufacture of product candidates and device candidates and of any products that receive regulatory approval or clearance. Beyond periodic
audits, we and the Portfolio Companies have no direct control over the ability of their contract manufacturers to maintain adequate quality
control, quality assurance, and qualified personnel. Nevertheless, we and the Portfolio Companies are responsible for ensuring that all
manufacturing is conducted in accordance with the applicable cGMP or QSR and other legal and regulatory requirements and scientific standards,
and our and the Portfolio Companies' reliance on third parties does not relieve them of their regulatory responsibilities. If the
FDA or a comparable foreign regulatory authority does not approve these facilities for the manufacture of any approved or cleared products
or if they withdraw any approval in the future, we or the Portfolio Companies may need to find alternative manufacturing facilities,
which would require the incurrence of significant additional time and costs and materially adversely affect the ability to develop, obtain
regulatory approval or clearance for or market any product candidates or device candidates, if approved or cleared. Similarly, if any
third-party manufacturers on which we, the Pharmaceutical Companies or Rafael Medical Devices rely fail to manufacture quantities of
their product candidates or device candidates at quality levels necessary to meet regulatory requirements and at a scale sufficient to
meet anticipated demand at a cost that allows them to achieve profitability, their and our business, financial condition, and prospects
could be materially and adversely affected.

 The anticipated reliance on a limited number
of third-party manufacturers exposes the Portfolio Companies and us to a number of risks, including the following:

 we, the Pharmaceutical Companies
 and Rafael Medical Devices may be unable to identify manufacturers on acceptable terms or
 at all because the number of potential manufacturers is limited, and the FDA must inspect
 any manufacturers for applicable cGMP and QSR compliance as part of our, the Pharmaceutical
 Companies' and Rafael Medical Devices' marketing applications;

 a new manufacturer would have to
 be educated in, or develop substantially equivalent processes for, the production of our,
 the Pharmaceutical Companies' product candidates and Rafael Medical Devices'
 device candidates;

 third-party manufacturers might
 be unable to timely manufacture our, Pharmaceutical Companies' product candidates and
 Rafael Medical Devices' device candidates or produce the quantity and quality required
 to meet their clinical and commercial needs, if any;

 contract manufacturers may not be
 able to execute the Pharmaceutical Companies' and Rafael Medical Devices' manufacturing
 procedures and other logistical support requirements appropriately;

 future contract manufacturers may
 not perform as agreed, may not devote sufficient resources to our, the Pharmaceutical Companies'
 product candidates or Rafael Medical Devices' device candidates, or may not remain
 in the contract manufacturing business for the time required to supply clinical trials or
 to successfully produce, store, and distribute approved or cleared products, if any;

 manufacturers are subject to ongoing
 periodic unannounced inspection by the FDA and corresponding state agencies and foreign regulatory
 authorities to ensure strict compliance with cGMP and QSR and other government regulations
 and corresponding foreign standards, and we and the Portfolio Companies have no direct control
 over third-party manufacturers' compliance with these regulations and standards, although
 our and the Portfolio Companies' reliance on third parties does not relieve them of
 their regulatory responsibilities;

 we or the Portfolio Companies may
 not own, or may have to share, the intellectual property rights to any improvements made
 by any third-party manufacturers in the manufacturing process for our, the Pharmaceutical
 Companies' product candidates and Rafael Medical Devices' device candidates;

 third-party manufacturers could
 breach or terminate their agreements with us, the Pharmaceutical Companies or Rafael Medical
 Devices;

 raw materials and components used
 in the manufacturing process, particularly those for which we or the Portfolio Companies
 have no other source or supplier, may not be available or may not be suitable or acceptable
 for use due to material or component defects;

 contract manufacturers and critical
 reagent suppliers may be subject to public health emergencies, inclement weather, as well
 as natural or man-made disasters; and

 contract manufacturers may have
 unacceptable or inconsistent product quality success rates and yields, and we, the Pharmaceutical
 Companies and Rafael Medical Devices will have no direct control over contract manufacturers'
 ability to maintain adequate quality control, quality assurance, and qualified personnel,
 although our, the Pharmaceutical Companies' and Rafael Medical Devices' reliance
 on third parties does not relieve them of their regulatory responsibilities.

 Our and the Portfolio Companies' business
could be materially adversely affected by business disruptions caused by third-party providers that could materially adversely affect
their and our potential future revenue and financial condition and increase their and our costs and expenses. Each of these risks could
delay or prevent the completion of our, the Pharmaceutical Companies' and Rafael Medical Devices' clinical trials or the
approval of any of our, the Pharmaceutical Companies' product candidates or Rafael Medical Devices' device candidates by
the FDA or comparable foreign regulatory authorities, result in higher costs, or adversely impact commercialization of any product candidates
in the event that they were to receive regulatory approval or clearance.

 We and the Portfolio Companies may, in
the future, form or seek collaborations or strategic alliances or enter into licensing arrangements, and we and/or the Portfolio Companies
may not realize the benefits of such collaborations, alliances or licensing arrangements.

 We and the Portfolio Companies may, in the future,
form or seek strategic alliances, create joint ventures or collaborations, or enter into licensing arrangements with third parties that
they believe will complement or augment their development and commercialization efforts with respect to our and the Pharmaceutical Companies'
product candidates, any future product candidates that we or they may develop, Rafael Medical Devices' device candidates, and any
future device candidates that we or they may develop. Any of these relationships may require the Portfolio Companies or us to incur non-recurring
and other charges, increase near- and long-term expenditures, trigger royalty payments that reduce revenues and profitability, issue
securities that dilute our existing stockholders or disrupt our or their management and business.

 In addition, we and the Portfolio Companies face
significant competition in seeking appropriate strategic partners, and the negotiation process is time-consuming and complex. Moreover,
we and the Portfolio Companies may not be successful in our or their efforts to establish a strategic partnership or other alternative
arrangements for any product candidates because they may be deemed to be at too early of a stage of development for collaborative effort,
and third parties may not view such product candidates as having the requisite potential to demonstrate safety and efficacy and obtain
regulatory approval or clearance.

 Further, collaborations involving our and the
Portfolio Companies' product candidates and device candidates are subject to numerous risks, which may include the following:

 collaborators have significant discretion
 in determining the efforts and resources that they will apply to a collaboration;

 collaborators may not pursue development
 and commercialization of our and the Portfolio Companies' product candidates or device
 candidates or may elect not to continue or renew development or commercialization of their
 product candidates or device candidates based on clinical trial results, changes in their
 strategic focus due to the acquisition of competitive products, availability of funding or
 other external factors, such as a business combination that diverts resources or creates
 competing priorities;

 collaborators may delay clinical
 trials, provide insufficient funding for a clinical trial, stop a clinical trial, abandon
 a product candidate or device candidate, repeat or conduct new clinical trials or require
 a new formulation of a product candidate or device candidate for clinical testing;

 collaborators could independently
 develop, or develop with third parties, products that compete directly or indirectly with
 our, the Pharmaceutical Companies' product candidates and Rafael Medical Devices'
 device candidates;

 a collaborator with marketing and
 distribution rights to one or more product candidates or device candidates may not commit
 sufficient resources to their marketing and distribution in the event that they were to receive
 regulatory approval or clearance;

 collaborators may not properly maintain
 or defend our or the Portfolio Companies' intellectual property rights or may use our
 or their intellectual property or proprietary information in a way that gives rise to actual
 or threatened litigation that could jeopardize or invalidate our or their intellectual property
 or proprietary information or expose us or them to potential liability;

 disputes may arise between us and/or
 the Portfolio Companies and a collaborator that cause the delay or termination of the research,
 development or commercialization of a product candidate or device candidate, or that result
 in costly litigation or arbitration that diverts management attention and resources;

 collaborations may be terminated
 and, if terminated, may result in a need for additional capital to pursue further development
 or commercialization of the applicable product candidates or device candidates; and

 collaborators may own or co-own
 intellectual property covering our or the Portfolio Companies' products that results
 from our or their collaborating with them, and in such cases, we and they would not have
 the exclusive right to commercialize such intellectual property.

 As a result, if we or the Portfolio Companies
enter into future collaboration agreements and strategic partnerships or out-license our, the Pharmaceutical Companies' product
candidates or Rafael Medical Devices' device candidates, we may not be able to realize the benefit of such transactions if we are
unable to successfully integrate them with our or their existing operations and company culture, which could delay our or their timelines
or otherwise adversely affect our or their business. We and the Portfolio Companies also cannot be certain that, following a strategic
transaction or license, we or they will achieve the revenue or specific net income that justifies such transaction. Furthermore, if conflicts
arise between our or their future corporate or academic collaborators or strategic partners and us or them, the other party may act in
a manner adverse to us or them and could limit our or their ability to implement our or their strategies. Any delays in entering into
future collaborations or strategic partnership agreements related to our or their product candidates or device candidates could delay
the development and commercialization of our or their product candidates and device candidates in certain geographies for certain indications,
which would harm our and their business prospects, financial condition and results of operations.

 Our, the Pharmaceutical Companies'
and Rafael Medical Devices' relationships with customers, physicians and third-party payors may be subject, directly or indirectly,
to federal and state healthcare fraud and abuse laws, false claims laws, health information privacy and security laws, and other healthcare
laws and regulations. If we, the Pharmaceutical Companies or Rafael Medical Devices or their respective employees, independent contractors,
consultants, commercial partners, or vendors violate these laws, they could face substantial penalties.

 Our, the Pharmaceutical Companies' and
Rafael Medical Devices' relationships with customers, physicians, and third-party payors may be subject, directly or indirectly,
to federal and state healthcare fraud and abuse laws, false claims laws, health information privacy and security laws, and other healthcare
laws and regulations. These laws may impact, among other things, their clinical research program, as well as their proposed and future
sales, marketing, and education programs. In particular, the promotion, sales, and marketing of healthcare items and services is subject
to extensive laws and regulations designed to prevent fraud, kickbacks, self-dealing, and other abusive practices. These laws and regulations
may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive, and other
business arrangements. The Portfolio Companies may also be subject to federal, state, and foreign laws governing the privacy and security
of identifiable patient information. The U.S. healthcare laws and regulations that may affect their ability to operate include, but are
not limited to:

 the federal Anti-Kickback Statute,
 which prohibits, among other things, any person or entity from knowingly and willfully, offering,
 paying, soliciting or receiving any remuneration, directly or indirectly, overtly or covertly,
 in cash or in kind, to induce, or in return for, the purchasing, leasing, ordering or arranging
 for the purchase, lease, or order of any item or service reimbursable under Medicare, Medicaid
 or other federal healthcare programs. The term "remuneration" has been broadly
 interpreted to include anything of value. Although there are a number of statutory exceptions
 and regulatory safe harbors protecting some common activities from prosecution, the exceptions
 and safe harbors are drawn narrowly. Practices that may be alleged to be intended to induce
 prescribing, purchases or recommendations, include any payments of more than fair market
 value, and may be subject to scrutiny if they do not qualify for an exception or safe harbor.
 In addition, a person or entity does not need to have actual knowledge of this statute or
 specific intent to violate it in order to have committed a violation;

 federal civil and criminal false
 claims laws, including the federal civil False Claims Act, and civil monetary penalty laws,
 which prohibit, among other things, individuals or entities from knowingly presenting, or
 causing to be presented, claims for payment or approval from Medicare, Medicaid, or other
 federal government programs that are false or fraudulent or knowingly making a false statement
 to improperly avoid, decrease or conceal an obligation to pay money to the federal government,
 including federal healthcare programs. In addition, the government may assert that a claim
 including items or services resulting from a violation of the federal Anti-Kickback Statute
 constitutes a false or fraudulent claim for purposes of the federal civil False Claims Act
 and the civil monetary penalties statute;

 the federal Health Insurance Portability
 and Accountability Act of 1996, or HIPAA, which created new federal civil and criminal statutes
 that prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud
 any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations,
 or promises, any of the money or property owned by, or under the custody or control of, any
 healthcare benefit program, including private third-party payors, and knowingly and willfully
 falsifying, concealing or covering up by any trick, scheme or device, a material fact or
 making any materially false, fictitious or fraudulent statements in connection with the delivery
 of, or payment for, healthcare benefits, items or services. Similar to the federal Anti-Kickback
 Statute, a person or entity does not need to have actual knowledge of the statute or specific
 intent to violate it in order to have committed a violation;

 HIPAA, as amended by the Health
 Information Technology for Economic and Clinical Health Act, and their respective implementing
 regulations, which impose requirements on certain healthcare providers, health plans, and
 healthcare clearinghouses, known as covered entities, and their respective business associates
 that perform services for them that involve the use or disclosure of individually identifiable
 protected health information, as well as their covered subcontractors, including breach notification
 regulations;

 new regulations adopted by the Securities
 and Exchange Commission, or SEC, effective December 18, 2023, that require greater disclosure
 regarding cybersecurity risk management, strategy and governance, as well as disclosure of
 material cybersecurity incidents, which may require reporting of a cybersecurity incident
 before its impact has been fully assessed or the underlying issue has been remediated, which
 could divert management's attention from incident response and could potentially reveal system
 vulnerabilities to threat actors, and for which failure to timely report such incidents under
 these or other similar rules could also result in monetary fines, sanctions or other forms
 of liability;

 analogous state data privacy and
 security laws and regulations that govern the collection, use, disclosure, transfer, storage,
 disposal, and protection of personal information, such as social security numbers, medical
 and financial information, and other information, including data breach laws that require
 timely notification to individuals, and at times regulators, the media or credit reporting
 agencies, if a company has experienced the unauthorized access or acquisition of personal
 information, as well as state laws such as the California Consumer Privacy Act or CCPA, which,
 among other things, contains new disclosure obligations for businesses that collect personal
 information about California residents and affords those individuals numerous rights relating
 to their personal information that may affect companies' ability to use personal information
 or share it with business partners, and the California Privacy Rights Act, or CPRA, which
 expands the scope of the CCPA, imposes new restrictions on behavioral advertising, and establishes
 a new California Privacy Protection Agency that will enforce the law and issue regulations,
 and became "operative" on January 1, 2023, with a 12-month "lookback provision"
 applicable to personal data collected on or after January 1, 2022, and the various state
 laws and regulations may be more restrictive than and not preempted by United States federal
 laws;

 analogous foreign data protection
 laws, including among others the EU General Data Protection Regulation, or the GDPR, EU member
 states' implementing legislation, and the UK GDPR, which imposes data protection requirements
 that include strict obligations and restrictions on the ability to collect, analyze, and
 transfer EEA or UK personal data, a requirement for prompt notice of data breaches to data
 subjects and supervisory authorities in certain circumstances, and possible substantial fines
 for any violations (including possible fines for certain violations of up to the greater
 of 20 million Euros or 4% of total worldwide annual turnover of the preceding financial year),
 with legal requirements in foreign countries relating to the collection, storage, processing,
 and transfer of personal data continuing to evolve and varying widely across jurisdictions;
 and

 the federal Physician Payments Sunshine
 Act, which requires certain manufacturers of drugs, devices, biologicals and medical supplies
 for which payment is available under Medicare, Medicaid or the Children's Health Insurance
 Program (with certain exceptions) to report annually to CMS information related to payments
 or other transfers of value made to physicians (defined to include doctors, dentists, optometrists,
 podiatrists, and chiropractors) and teaching hospitals, as well as ownership and investment
 interests held by physicians and their immediate family members. Beginning in 2022, such
 reporting obligations include payments and other transfers of value provided during the previous
 year to physician assistants, nurse practitioners, clinical nurse specialists, anesthesiologist
 assistants, certified registered nurse anesthetists, and certified nurse-midwives.

 We and the Portfolio Companies may also be subject
to state and foreign equivalents of each of the healthcare laws described above, among others, some of which may be broader in scope
and vary significantly from the federal laws. For example, they may be subject to the following: state anti-kickback and false claims
laws that may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental
third party payors, including private insurers, or that apply regardless of payor; state laws that require pharmaceutical companies to
comply with the pharmaceutical industry's and medical device industry's voluntary compliance guidelines and the relevant compliance
guidance promulgated by the federal government; state laws that require drug and device manufacturers to report information related to
payments and other transfers of value to physicians and other healthcare providers, marketing expenditures, or drug pricing; state and
local laws requiring the registration of pharmaceutical and device sales and medical representatives; and state and foreign laws, such
as the GDPR governing the privacy and security of health information in some circumstances, many of which differ from each other in significant
ways and often are not preempted by HIPAA, thus complicating compliance efforts. Additionally, they may be subject to federal consumer
protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers.

 Because of the breadth of these laws and the
narrowness of the statutory exceptions and regulatory safe harbors available, it is possible that some of the Portfolio Companies'
business activities, or their arrangements with physicians, could be subject to challenge under one or more of such laws. It is not always
possible to identify and deter employee misconduct or business noncompliance, and the precautions we and the Portfolio Companies take
to detect and prevent inappropriate conduct may not be effective in controlling unknown or unmanaged risks or losses or in protecting
us or them from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or
regulations. Efforts to ensure that our and their business arrangements will comply with applicable healthcare laws may involve substantial
costs. It is possible that governmental and enforcement authorities will conclude that our or their business practices may not comply
with current or future statutes, regulations or case law interpreting applicable fraud and abuse or other healthcare laws and regulations.
If we, the Pharmaceutical Companies or Rafael Medical Devices or their respective employees, independent contractors, consultants, commercial
partners, and vendors violate these laws, they and we may be subject to investigations, enforcement actions and/or significant penalties,
including the imposition of significant civil, criminal, and administrative penalties, damages, disgorgement, monetary fines, imprisonment,
possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, contractual damages, reputational
harm, diminished profits and future earnings, additional reporting requirements and/or oversight if they or we become subject to a corporate
integrity agreement or similar agreement to resolve allegations of non-compliance with these laws, and curtailment of our, the Pharmaceutical
Companies' and Rafael Medical Devices' operations, any of which could adversely affect their ability to operate their business
and their and our results of operations. In addition, the approval or clearance, if any, and commercialization of any of our or the Pharmaceutical
Companies' product candidates or Rafael Medical Devices' device candidates outside the United States will also likely subject
them and us to foreign equivalents of the healthcare laws mentioned above, among other foreign laws.

 Risks Related to our Commercial Real Estate Business

 We may be unable to renew leases or relet
space as leases expire.

 If tenants decide not to renew their leases upon
expiration, we may not be able to relet the space. Even if tenants do renew or we can relet the space, the terms of a renewal or new
lease, taking into account among other things, the cost of improvements to the property and leasing commissions, may be less favorable
than the terms in the expired leases. In addition, changes in space utilization by tenants may impact our ability to renew or relet space
without the need to incur substantial costs in renovating or redesigning the internal configuration of the relevant property. If we are
unable to promptly renew the leases or relet the space at similar rates or if we incur substantial costs in renewing or reletting the
space, our cash flow and ability to service debt obligations and pay dividends and distributions to security holders could be adversely
affected.

 We face competition for tenants.

 The leasing of real estate is highly competitive.
The principal competitive factors are rent, location, services provided and the nature and condition of the property to be leased. We
directly compete with all owners, developers and operators of similar space in the areas in which our properties are located. There are
number of competitive office properties the areas in which our property is located, which may be newer or better located than our property
and could have a material adverse effect on our ability to lease office space at our property, and on the effective rents we are able
to charge.

 Risks Related to Intellectual Property

 If we or the Portfolio Companies are unable
to adequately maintain or protect our proprietary technologies and product candidates and device candidates and services, if the scope
of the patent protection obtained is not sufficiently broad, or if the terms of patents are insufficient to protect product candidates,
device candidates, services or technologies for an adequate amount of time, competitors could develop and commercialize technology and
products similar or identical to that technology or those product candidates, device candidates and services, and our ability to successfully
commercialize technology or product candidates, device candidates or services may be materially impaired.

 We and the Portfolio Companies rely primarily
upon a combination of patents, trademarks, trade secret protection, and other intellectual property rights as well as nondisclosure,
confidentiality, and other contractual agreements to protect our intellectual property related to our brands, product candidates and
device candidates, services, and other proprietary technologies. Our and their success depends on our and their ability to develop, manufacture,
market, and sell our and their product candidates and device candidates, if approved, and our and their delivery of services and use
of proprietary technologies without alleged or actual infringement, misappropriation or other violation of the patents and other intellectual
property rights of third parties. There have been many lawsuits and other proceedings asserting patents and other intellectual property
rights in the biopharmaceutical industry. We and Portfolio Companies cannot assure you that our and their product candidates and device
candidates, services or technologies will not infringe existing or future third-party patents. Because patent applications can take many
years to issue and may be confidential for 18 months or more after filing, there may be applications now pending of which we and they
are unaware and which may later result in issued patents that we or they may infringe by commercializing our or their product candidates
or device candidates if they receive approval or clearance or our or their services or technologies. There may also be issued patents
or pending patent applications that we or they are aware of, but that we and they think are irrelevant to our product candidates or device
candidates or our services or technologies, which may ultimately be found to be infringed by the manufacture, sale, or use of our or
their product candidates or device candidates, services or technologies. Moreover, we and they may face claims from non-practicing entities
that have no relevant product revenue and against whom our patent portfolio may thus have no deterrent effect. In addition, many of our
and their product candidates have a complex structure that makes it difficult to conduct a thorough search and review of all potentially
relevant third-party patents. Because we and they have not yet conducted a formal freedom to operate analysis for patents related to
our and their product candidates or device candidates, we and they may not be aware of issued patents that a third party might assert
are infringed by one of our or their current or future product candidates or device candidates, which could materially impair our and
their ability to commercialize our and their product candidates or device candidates if they receive regulatory approval or clearance.
Even if we and they diligently search third-party patents for potential infringement by our and their products or product candidates,
or devices or device candidates, we and they may not successfully find patents that our and their products or product candidates or devices
or device candidates may infringe. If we and the Portfolio Companies are unable to secure and maintain freedom to operate, others could
preclude us from commercializing our product candidates or device candidates.

 The process of obtaining patent protection is
expensive and time-consuming, and we and the Portfolio Companies may not be able to prosecute all necessary or desirable patent applications
at a reasonable cost or in a timely manner. We and they may choose not to seek patent protection for certain innovations or products
and may choose not to pursue patent protection in certain jurisdictions, and, under the laws of certain jurisdictions, patents or other
intellectual property rights may be unavailable or limited in scope and, in any event, any patent protection we or they obtain may be
limited. As a result, in some jurisdictions, some of our and their products currently or in the future may not be protected by patents.
We and the Portfolio Companies generally apply for patents in those countries where we intend to make, have made, use, offer for sale,
or sell products and where we assess the risk of infringement to justify the cost of seeking patent protection. However, we and they
may not accurately predict all the countries where patent protection would ultimately be desirable. If we and they fail to timely file
a patent application in any such country or major market, we and they may be precluded from doing so at a later date. Competitors may
use our and their technologies in jurisdictions where we have not obtained patent protection to develop competing products and, further,
may export otherwise infringing products to territories in which we have patent protection that may not be sufficient to terminate infringing
activities. In addition, the actual protection afforded by a patent varies on a product-by-product basis, from country to country, and
depends upon many factors, including the type of patent, the scope of its coverage, the availability of regulatory-related extensions,
the availability of legal remedies in a particular country, and the validity and enforceability of the patent.

 Furthermore, we and the Portfolio Companies cannot
guarantee that any patents will be issued from any pending or future owned or licensed patent applications, or that any current or future
patents will be valid or enforceable or provide us or them with any meaningful protection or competitive advantage. Even if issued, existing
or future patents may be challenged, including with respect to ownership, narrowed, invalidated, held unenforceable or circumvented,
any of which could limit our and their ability to prevent competitors and other third parties from developing and marketing similar products
or limit the length of terms of patent protection we and they may have for our product candidates or device candidates. Moreover, should
we and they be unable to obtain meaningful patent coverage in jurisdictions with commercially significant markets, our and their ability
to extend and reinforce patent protection for these product candidates in those jurisdictions may be adversely impacted, which could
limit our and their ability to prevent competitors and other third parties from developing and marketing similar products or limit the
length of terms of patent protection we and they may have for those product candidates. Other companies may also design around technologies
we and they have patented, licensed or developed. In addition, the issuance of a patent does not give us or them the right to practice
the patented invention. Third parties may have blocking patents that could prevent us and them from marketing our products or practicing
our patented technology.

 The patent positions of biopharmaceutical companies
can be highly uncertain and involve complex legal, scientific, and factual questions for which important legal principles remain unresolved.
As a result, the issuance, scope, validity, enforceability, and commercial value of our and their patent rights may be uncertain. The
standards that the United States Patent and Trademark Office, or the USPTO, and its foreign counterparts use to grant patents are not
always applied predictably or uniformly. Changes in either the patent laws, implementing regulations or the interpretation of patent
laws may diminish the value of our rights and the rights of the Portfolio Companies. The legal systems of certain countries do not protect
intellectual property rights to the same extent as the laws of the United States, if at all, and many companies have encountered significant
problems in protecting and defending such rights in foreign jurisdictions. For example, patent laws in various jurisdictions, including
significant commercial markets such as Europe, restrict the patentability of methods of treatment of the human body more than United
States law does. In addition, many countries, including certain countries in Europe, have compulsory licensing laws under which a patent
owner may be compelled to grant licenses to third parties (for example, the patent owner has failed to "work" the invention
in that country, or the third party has patented improvements). In addition, many countries limit the enforceability of patents against
government agencies or government contractors. In these countries, the patent owner may have limited remedies, which could materially
diminish the value of the patent. Moreover, the legal systems of certain countries, particularly certain developing countries, do not
favor the aggressive enforcement of patent and other intellectual property protection, which makes it difficult to stop infringement.

 Because patent applications in the United States,
Europe, and many other jurisdictions are typically not published until 18 months after filing, or in some cases not at all, and because
publications of discoveries in scientific literature lag behind actual discoveries, we and the Portfolio Companies cannot be certain
that we were the first to conceive or reduce to practice the inventions claimed in our issued patents or pending patent applications,
or that we were the first to file for protection of the inventions set forth in our patents or pending patent applications. We and they
can give no assurance that all of the potentially relevant art relating to our patents and patent applications has been found; overlooked
prior art could be used by a third party to challenge the validity, enforceability, and scope of our patents or prevent a patent from
issuing from a pending patent application. As a result, we and they may not be able to obtain or maintain protection for certain inventions.
Therefore, the validity, enforceability, and scope of our and their patents in the United States, Europe, and in other countries cannot
be predicted with certainty and, as a result, any patents that we own or license may not provide sufficient protection against our competitors.

 Third parties may challenge any existing patent
or future patent that is owned or licensed by us or the Portfolio Companies through adversarial proceedings in the issuing offices or
in court proceedings, including as a response to any assertion of our patents against them. In any of these proceedings, a court or agency
with jurisdiction may find our and their patents invalid and/or unenforceable, or, even if valid and enforceable, insufficient to provide
protection against competing products, technologies and services sufficient to achieve our business objectives. We and they may be subject
to a third-party pre-issuance submission of prior art to the USPTO, or reexamination by the USPTO if a third party asserts a substantial
question of patentability against any claim of a U.S. patent we own or license. The adoption of the Leahy-Smith America Invents Act,
or the Leahy-Smith Act, in September 2011 established additional opportunities for third parties to invalidate U.S. patent claims, including
inter partes review and post-grant review proceedings. Outside of the United States, patents we or they own or license may become subject
to patent opposition or similar proceedings, which may result in loss of scope of some claims or the entire patent. In addition, such
proceedings are very complex and expensive and may divert our management's attention from our core business. If any of our or their
patents are challenged, invalidated, or circumvented by third parties or otherwise limited or expire prior to the commercialization of
our products, services or technologies, and if we do not own or have exclusive rights to other enforceable patents protecting our products,
services or other technologies, competitors and other third parties could market products and use processes that are substantially similar,
or superior, to ours and theirs, and our business would suffer.

 The entities in which we hold interests or in
which we may invest may not make necessary payments or take other actions to protect intellectual property or other rights that we or
they own, license or have acquired from third parties, which could result in the loss or impairment of those rights and the reduction
of the value of our interests.

 The degree of future protection for our and their
proprietary rights is uncertain because legal means afford only limited protection and may not adequately protect our rights or permit
us to gain or keep a competitive advantage. For example:

 others may be able to develop products
 that are similar to, or better than, ours and theirs in a way that is not covered by the
 claims of our patents;

 we and they might not have been
 the first to conceive or reduce to practice the inventions covered by our patents or pending
 patent applications;

 we and they might not have been
 the first to file patent applications for our inventions;

 any patents that we and they obtain
 may not provide us or them with any competitive advantages or may ultimately be found invalid
 or unenforceable; and/or

 we and they may not develop additional
 proprietary technologies that are patentable.

 We and the Portfolio Companies are generally
also subject to all of the same risks with respect to protection of intellectual property that we license as we are for intellectual
property that we own. We and they currently in-license certain intellectual property from third parties to be able to use such intellectual
property in our products and product candidates and to aid in our research activities. In the future, we and they may in-license intellectual
property from additional licensors. We and they may rely on certain of these licensors to file and prosecute patent applications and
maintain, or assist us in the maintenance of, patents and otherwise protect the intellectual property we license from these licensors.
We and they may have limited control over these activities or any other intellectual property that may be related to our in-licensed
intellectual property. For example, we and they cannot be certain that such activities by these licensors have been or will be conducted
diligently or in compliance with applicable laws and regulations or will result in valid and enforceable patents and other intellectual
property rights. We and they may have limited control over the manner in which our licensors initiate, or support our efforts to initiate,
an infringement proceeding against a third-party infringer of the intellectual property rights, or defend certain of the intellectual
property that is licensed to us or them. If we or our licensors fail to adequately protect this intellectual property, our ability to
develop and commercialize product candidates and products and device candidates and devices, if any receive regulatory approval or clearance,
could suffer.

 We and the Portfolio Companies may become
involved in lawsuits to protect or enforce our patents or other intellectual property, which could be expensive, time-consuming, and
unsuccessful.

 Competitors may infringe, misappropriate or otherwise
violate the patents, trademarks, copyrights, trade secrets or other intellectual property of us or the Portfolio Companies, or those
of our licensors. To counter infringement, misappropriation, unauthorized use or other violations, we and they may be required to file
legal claims, which can be expensive and time consuming and divert the time and attention of our management and scientific personnel.
In some cases, it may be difficult or impossible to detect third-party infringement or misappropriation of our intellectual property
rights, even in relation to issued patent claims, and proving any such infringement may be even more difficult.

 We and the Portfolio Companies may not be able
to prevent, alone or with our licensees or any future licensors, infringement, misappropriation or other violations of our intellectual
property rights, particularly in countries where the laws may not protect those rights as fully as in the United States. Any claims we
and they assert against perceived infringers could provoke these parties to assert counterclaims against us or them alleging that we
infringe their patents. In patent litigation in the United States, defendant counterclaims alleging invalidity or unenforceability are
commonplace. The outcome following legal assertions of invalidity and unenforceability is unpredictable. We and they cannot be certain
that there is no invalidating prior art, of which we and the patent examiner were unaware during prosecution. If a third party or a defendant
were to prevail on a legal assertion of invalidity or unenforceability, we and they would lose at least part, and perhaps all, of any
future patent protection on our current or future product candidates or device candidates, services or technologies. Such a loss of patent
protection could harm our and their business. In addition, in a patent infringement proceeding, there is a risk that a court will decide
that a patent of ours or theirs is invalid or unenforceable, in whole or in part, and that we do not have the right to stop the other
party from exploiting the claimed subject matter at issue. There is also a risk that, even if the validity of such patents is upheld,
the court will construe the patent's claims narrowly or decide that we and they do not have the right to stop the other party from
exploiting its technology on the grounds that our patents do not cover such technology. An adverse outcome in a litigation or proceeding
involving our or their patents could limit our ability to assert our patents against those parties or other competitors, and may curtail
or preclude our ability to exclude third parties from making, using, importing, and selling similar or competitive products, services,
or technologies. Any of these occurrences could adversely affect our and their competitive business position, business prospects, and
financial condition. Similarly, if we or they assert trademark infringement claims, a court may determine that the marks we have asserted
are invalid or unenforceable, or that the party against whom we have asserted trademark infringement has superior rights to the marks
in question or has not infringed them. In this case, we and they could ultimately be forced to cease use of such trademarks.

 In any infringement, misappropriation or other
intellectual property litigation, any award of monetary damages we or they receive may not be commercially valuable. Furthermore, because
of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our
and their confidential information could be compromised by disclosure during litigation. Moreover, there can be no assurance that we
will have sufficient financial or other resources to file and pursue such infringement claims, which typically last for years before
they are concluded. Even if we and they ultimately prevail in such claims, the monetary cost of such litigation and the diversion of
the attention of our management and scientific personnel could outweigh any benefit we receive as a result of the proceedings. We and
they may not be able to detect or prevent misappropriation of our intellectual property rights, particularly in countries where the laws
may not protect those rights as fully as in the United States. Our and their business could be harmed if in litigation the prevailing
party does not offer us or them a license on commercially reasonable terms. Any litigation or other proceedings to enforce our and their
intellectual property rights may fail, and even if successful, may result in substantial costs and distract our management and other
employees.

 Our commercial success and that of the
Portfolio Companies depends significantly on our ability to operate without infringing upon the intellectual property rights of third
parties.

 The biopharmaceutical industry is subject to
rapid technological change and substantial litigation regarding patent and other intellectual property rights. Our competitors and those
of the companies in which we hold interests, in both the United States and abroad, many of which have substantially greater resources
and have made substantial investments in patent portfolios and competing technologies, may have applied for or obtained, or may in the
future apply for or obtain, patents that will prevent, limit or otherwise interfere with our ability to make, use, and sell our product
candidates, device candidates, services, and technologies. Numerous third-party patents exist in the fields relating to our and their
products and services, and it is difficult for industry participants, including us and them, to identify all third-party patent rights
relevant to our product candidates, device candidates, services, and technologies. As the biopharmaceutical industry expands and more
patents are issued, the risk increases that our and their product candidates or device candidates, services or technologies may give
rise to claims of infringement of the patent rights of others. Moreover, because some patent applications are maintained as confidential
for a certain period of time, we cannot be certain that third parties have not filed patent applications that cover our product candidates,
device candidates, services, and technologies. Therefore, it is uncertain whether the issuance of any third-party patent would require
us or them to alter our development or commercial strategies for our product candidates, device candidates, services or technologies,
or to obtain licenses or cease certain activities.

 Patents could be issued to third parties that
we and the Portfolio Companies may ultimately be found to infringe. Third parties may have or obtain valid and enforceable patents or
proprietary rights that could block us from developing products using our technology. If any third-party patents were held by a court
of competent jurisdiction to cover the manufacturing process of our or their product candidates, constructs or molecules used in or formed
during the manufacturing process, any final product itself if it received regulatory approval, or our device candidates, the holders
of any such patents may be able to block our ability to commercialize the product candidate or device candidate unless we obtain a license
under the applicable patents, or until such patents expire or they are determined to be held invalid or unenforceable. Our and their
failure to obtain or maintain a license to any technology that we require to develop or commercialize our current and future product
candidates and device candidates, may materially harm our business, financial condition, and results of operations. Furthermore, we and
they would be exposed to a threat of litigation.

 From time to time, we and the Portfolio Companies
may be party to, or threatened with, litigation or other proceedings with third parties, including non-practicing entities, who allege
that our product candidates, components of our product candidates, device candidates, components of our device candidates, services,
and/or proprietary technologies infringe, misappropriate or otherwise violate their intellectual property rights. The types of situations
in which we and they may become a party to such litigation or proceedings include:

 we and our collaborators may initiate
 litigation or other proceedings against third parties seeking to invalidate the patents held
 by those third parties or to obtain a judgment that our product candidates, device candidates,
 services, technologies or processes do not infringe those third parties' patents;

 we and our collaborators may participate
 at substantial cost in International Trade Commission proceedings to abate importation of
 third-party products that would compete unfairly with our products;

 if our competitors file patent applications
 that claim technology also claimed by us or our licensors, we or our licensors may be required
 to participate in interference, derivation or opposition proceedings to determine the priority
 of invention, which could jeopardize our patent rights and potentially provide a third party
 with a dominant patent position;

 if third parties initiate litigation
 claiming that our processes or product candidates or those of Portfolio Companies, infringe
 their patent or other intellectual property rights, we, they and our collaborators will need
 to defend against such proceedings;

 if third parties initiate litigation
 or other proceedings, including inter partes reviews, oppositions or other similar agency
 proceedings, seeking to invalidate patents owned by or licensed to us or the Portfolio Companies,
 or to obtain a declaratory judgment that their products, services, or technologies do not
 infringe our patents or patents licensed to us or them, we will need to defend against such
 proceedings;

 we and the Portfolio Companies may
 be subject to ownership disputes relating to intellectual property, including disputes arising
 from conflicting obligations of consultants or others who are involved in developing our
 product candidates, device candidates, services, technologies, and processes; and

 if a license to necessary technology
 is terminated, the licensor may initiate litigation claiming that our processes or product
 candidates, device candidates, services, or technologies or those of the Portfolio Companies
 infringe or misappropriate its patent or other intellectual property rights and/or that we
 breached our obligations under the license agreement, and we and our collaborators would
 need to defend against such proceedings.

 These lawsuits and proceedings, regardless of
merit, are time-consuming and expensive to initiate, maintain, defend or settle, and could divert the time and attention of managerial
and technical personnel, which could materially adversely affect our business and that of the Portfolio Companies. Any such claim could
also force us to do one or more of the following:

 incur substantial monetary liability
 for infringement or other violations of intellectual property rights, which we may have to
 pay if a court decides that the product candidate, device candidate, service, or technology
 at issue infringes or violates the third party's rights, and if the court finds that
 the infringement was willful, we and the Portfolio Companies could be ordered to pay up to
 treble damages and the third party's attorneys' fees;

 pay substantial damages to our customers
 or end users and those of the Portfolio Companies to discontinue use or replace infringing
 technology with non-infringing technology;

 stop manufacturing, offering for
 sale, selling, using, importing, exporting or licensing the product or technology incorporating
 the allegedly infringing technology or stop incorporating the allegedly infringing technology
 into such product, service, or technology;

 obtain from the owner of the infringed
 intellectual property right a license, which may require us and the Portfolio Companies to
 pay substantial upfront fees or royalties to sell or use the relevant technology and which
 may not be available on commercially reasonable terms, or at all;

 redesign
 our product candidates, device candidates, services, and technology and those of the Portfolio
 Companies so they do not infringe or violate the third party's intellectual property
 rights, which may not be possible or may require substantial monetary expenditures and time,
 including potential expenditures and time associated with any regulatory proceedings that
 might be required to secure regulatory approval for any redesigned product candidates, device
 candidates, services or technology;

 enter into cross-licenses with our
 competitors and those of the Portfolio Companies, which could weaken our overall intellectual
 property position;

 lose the opportunity to license
 our technology and that of the Portfolio Companies to others or to collect royalty payments
 based upon successful protection and assertion of our intellectual property against others;

 find alternative suppliers for non-infringing
 products and technologies, which could be costly and create significant delay; or

 relinquish rights associated with
 one or more of our patent claims or those of the Portfolio Companies, if those claims are
 held invalid or otherwise unenforceable

 Some of our competitors and those of the Portfolio
Companies may be able to sustain the costs of complex intellectual property litigation more effectively than we can because those competitors
have substantially greater resources. In addition, intellectual property litigation, regardless of its outcome, may cause negative publicity,
adversely impact prospective customers, cause product shipment delays, or prohibit us or them from manufacturing, marketing or otherwise
commercializing our products, services, and technology. Any uncertainties resulting from the initiation and continuation of any litigation
could have a material adverse effect on our ability to raise additional funds or otherwise have a material adverse effect on our business,
results of operation, financial condition or cash flows.

 In addition, we and the Portfolio Companies may
indemnify our customers and distributors against claims relating to the infringement of intellectual property rights of third parties
related to our product candidates or device candidates, services or technologies. Third parties may assert infringement claims against
our customers or distributors. These claims may require us or them to initiate or defend protracted and costly litigation on behalf of
our customers or distributors, regardless of the merits of these claims. If any of these claims succeed, we and they may be forced to
pay damages on behalf of our customers, suppliers or distributors, or may be required to obtain licenses for the product candidates,
device candidates, services or technologies they use. If we and they cannot obtain all necessary licenses on commercially reasonable
terms, our customers may be forced to stop using our products, services or technologies.

 Furthermore, because of the substantial amount
of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information
and that of the Portfolio Companies could be compromised by disclosure during this type of litigation. There could also be public announcements
of the results of hearings, motions or other interim proceedings or developments, which could have a material adverse effect on the price
of our common stock. If securities analysts or investors perceive these results to be negative, it could have a material adverse effect
on the price of our common stock. The occurrence of any of these events may have a material adverse effect on our business, results of
operation, financial condition or cash flows.

 If we and the Portfolio Companies are unable
to protect the confidentiality of our trade secrets, our business and competitive position may be harmed.

 In addition to patent and trademark protection,
we and the Portfolio Companies also rely on trade secrets, including unpatented know-how, technology and other proprietary information,
to maintain our competitive position. Because we and they expect to rely on third parties to manufacture our product candidates and device
candidates, and we expect to continue to collaborate with third parties on the development of our product candidates and device candidates,
we must, at times, share trade secrets with them. We and they seek to protect our respective trade secrets, in part, by entering into
non-disclosure and confidentiality agreements with parties who have access to them prior to disclosing our proprietary information, such
as our consultants and vendors, or our former or current employees. These agreements typically limit the rights of third parties to use
or disclose our and their confidential information, including our trade secrets. We and they also enter into confidentiality and invention
assignment agreements with our employees and consultants. Despite these efforts, however, any of these parties may breach the agreements
and disclose our or their trade secrets and other unpatented or unregistered proprietary information, and once disclosed, we are likely
to lose trade secret protection. Monitoring unauthorized uses and disclosures of our and their intellectual property is difficult, and
we do not know whether the steps we have taken to protect our intellectual property will be effective. In addition, we and they may not
be able to obtain adequate remedies for any such breaches. Enforcing a claim that a party illegally disclosed or misappropriated a trade
secret is difficult, expensive, and time-consuming, and the outcome is unpredictable. In addition, some courts inside and outside the
United States are less willing or unwilling to enforce trade secret protection. A competitor's discovery of our or their trade
secrets would impair our competitive position and have an adverse impact on our business, operating results, and financial condition.
Additionally, we and they cannot be certain that competitors will not gain access to our trade secrets and other proprietary confidential
information or independently develop substantially equivalent information and techniques.

 Changes in patent law could diminish the
value of patents in general, thereby impairing the ability of us and the Portfolio Companies to protect our respective existing and future
product candidates, device candidates, processes and technologies.

 As is the case with other biopharmaceutical companies,
our success and that of the Portfolio Companies is heavily dependent on intellectual property, particularly patents. Obtaining and enforcing
patents in the biopharmaceutical industry involves both technological and legal complexity, and is therefore costly, time consuming,
and inherently uncertain. In addition, the United States has recently enacted and is currently implementing wide-ranging patent reform
legislation. Recent patent reform legislation could increase the uncertainties and costs surrounding the prosecution of our and their
patent applications and the enforcement or defense of our issued patents. On September 16, 2011, the Leahy-Smith Act was signed into
law. The Leahy-Smith Act includes a number of significant changes to U.S. patent law. These include provisions that affect the way patent
applications are prosecuted, redefine prior art, may affect patent litigation, and switched the United States patent system from a "first-to-invent"
system to a "first-to-file" system. Under a "first-to-file" system, assuming the other requirements for patentability
are met, the first inventor to file a patent application generally will be entitled to the patent on an invention regardless of whether
another inventor had conceived or reduced to practice the invention earlier. The USPTO recently developed new regulations and procedures
to govern administration of the Leahy-Smith Act, and many of the substantive changes to patent law associated with the Leahy-Smith Act,
in particular, the first-to-file provisions, became effective on March 16, 2013. It is not clear what, if any, impact the Leahy-Smith
Act will have on the operation of our business. The Leahy-Smith Act and its implementation could increase the uncertainties and costs
surrounding the prosecution of our and their patent applications and the enforcement or defense of our issued patents, all of which could
have a material adverse effect on our business and financial condition.

 In addition, patent reform legislation may pass
in the future that could lead to additional uncertainties and increased costs surrounding the prosecution, enforcement and defense of
our and their patents and pending patent applications. Recent U.S. Supreme Court rulings have narrowed the scope of patent protection
available in certain circumstances and weakened the rights of patent owners in certain situations. Furthermore, the U.S. Supreme Court
and the U.S. Court of Appeals for the Federal Circuit have made, and will likely continue to make, changes in how the patent laws of
the United States are interpreted. Similarly, foreign courts have made, and will likely continue to make, changes in how the patent laws
in their respective jurisdictions are interpreted. We and the Portfolio Companies cannot predict future changes in the interpretation
of patent laws or changes to patent laws that might be enacted into law by United States and foreign legislative bodies. Those changes
may materially affect our and their patents or patent applications and our ability to obtain additional patent protection in the future.

 The United States federal government retains
certain rights in inventions produced with its financial assistance under the Patent and Trademark Law Amendments Act, or the Bayh-Dole
Act. The federal government retains a "nonexclusive, nontransferable, irrevocable, paid-up license" for its own benefit.
The Bayh-Dole Act also provides federal agencies with "march-in rights." March-in rights allow the government, in specified
circumstances, to require the contractor or successors in title to the patent to grant a "nonexclusive, partially exclusive, or
exclusive license" to a "responsible applicant or applicants." If the patent owner refuses to do so, the government
may grant the license itself. We partner with a number of universities, including the University of Iowa and the University of Texas
Southwestern Medical Center, with respect to certain of our research, development, and manufacturing. While it is our policy to avoid
engaging our university partners in projects in which there is a risk that federal funds may be commingled, we cannot be sure that any
co-developed intellectual property will be free from government rights pursuant to the Bayh-Dole Act. If, in the future, we co-own or
license in technology which is critical to our business that is developed in whole or in part with federal funds subject to the Bayh-Dole
Act, our ability to enforce or otherwise exploit patents covering such technology may be adversely affected.

 If we and the Portfolio Companies do not
obtain patent term extensions in the United States under the Hatch-Waxman Act and in foreign countries under similar legislation with
respect to our product candidates and device candidates, thereby potentially extending the term of marketing exclusivity for such product
candidates and device candidates, our business may be harmed.

 In the United States, a patent that covers an
FDA-approved drug, biologic or medical device may be eligible for a term extension designed to restore the period of the patent term
that is lost during the premarket regulatory review process conducted by the FDA. Depending upon the timing, duration, and conditions
of FDA regulatory approval of our and the Portfolio Companies product candidates and device candidates, one or more of our U.S. patents
may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, or the Hatch-Waxman
Act, which permits a patent term extension of up to a maximum of five years beyond the normal expiration of the patent if the patent
is eligible for such an extension under the Hatch-Waxman Act as compensation for patent term lost during development and the FDA regulatory
review process, which is limited to the approved indication (and potentially additional indications approved during the period of extension)
covered by the patent. This extension is limited to only one patent that covers the approved product, the approved use of the product,
or a method of manufacturing the product. However, the applicable authorities, including the FDA and the USPTO in the United States,
and any equivalent regulatory authority in other countries, may not agree with our or their assessment of whether such extensions are
available, and may refuse to grant extensions to our patents, or may grant more limited extensions than we request.

 We and the Portfolio Companies may not receive
an extension if we fail to apply within applicable deadlines, fail to apply prior to expiration of relevant patents or otherwise fail
to satisfy applicable requirements. Even if we or they are granted such extension, the duration of such extension may be less than our
request, and the patent term may still expire before or shortly after we receive FDA regulatory approval. If we or they are unable to
extend the expiration date of our existing patents or obtain new patents with longer expiry dates, our competitors may be able to take
advantage of our investment in development and clinical trials by referencing our clinical and preclinical data to obtain approval of
competing products following our patent expiration and launch their product earlier than might otherwise be the case.

 Obtaining and maintaining patent protection
depends on compliance with various procedural, document submission, fee payment, and other requirements imposed by governmental patent
agencies, and our patent protection and that of the Portfolio Companies could be reduced or eliminated for non-compliance with these
requirements.

 The USPTO and various foreign governmental patent
agencies require compliance with a number of procedural, documentary, fee payment, and other similar provisions during the patent application
process. In addition, periodic maintenance fees on issued patents often must be paid to the USPTO and foreign patent agencies over the
lifetime of the patent. While an unintentional lapse can in many cases be cured by payment of a late fee or by other means in accordance
with the applicable rules, there are situations in which noncompliance can result in abandonment or lapse of the patent or patent application,
resulting in partial or complete loss of patent rights in the relevant jurisdiction. Non-compliance events that could result in abandonment
or lapse of a patent or patent application include, but are not limited to, failure to respond to official actions within prescribed
time limits, non-payment of fees, and failure to properly legalize and submit formal documents. If we or the Portfolio Companies fail
to maintain the patents and patent applications covering our product candidates, device candidates, processes or technologies, we may
not be able to stop a competitor from marketing products that are the same as or similar to our own or theirs, which would have a material
adverse effect on our business.

 If our trademarks and trade names and those
of the Portfolio Companies are not adequately protected, then we may not be able to build name recognition in our markets of interest
and our business may be adversely affected.

 We and the Portfolio Companies have not yet registered
trademarks for a commercial trade name for all of our product candidate(s) or device candidates, including in the United States or elsewhere.
During trademark registration proceedings, our and their trademark application(s) may be rejected. Although we are given an opportunity
to respond to those rejections, we may be unable to overcome such rejections. In addition, in the USPTO and in comparable agencies in
many foreign jurisdictions, third parties can oppose pending trademark applications and seek to cancel registered trademarks. Opposition
or cancellation proceedings may be filed against our and their trademarks, and our trademarks may not survive such proceedings. Moreover,
any name we and they propose to use with our product candidate(s) or device candidate(s) in the United States must be approved by the
FDA, regardless of whether we have registered it, or applied to register it, as a trademark. The FDA typically conducts a review of proposed
product names, including an evaluation of potential for confusion with other product names. If the FDA objects to any of our or their
proposed proprietary product names, we may be required to expend significant additional resources in an effort to identify a suitable
substitute name that would qualify under applicable trademark laws, not infringe the existing rights of third parties, and be acceptable
to the FDA.

 Our registered or unregistered trademarks or
trade names and those of the Portfolio Companies may be challenged, infringed, circumvented, declared generic or determined to be infringing
on other marks. We may not be able to protect our and their rights in these trademarks and trade names, which we need in order to build
name recognition with potential partners or customers in our markets of interest. In addition, third parties have used trademarks similar
and identical to our and their trademarks in foreign jurisdictions, and have filed or may in the future file for registration of such
trademarks. If such third parties succeed in registering or developing common law rights in such trademarks, and if we and they are not
successful in challenging such third-party rights, we may not be able to use these trademarks to market our products in those countries.
In any case, if we are unable to establish name recognition based on our trademarks and trade names, then we may not be able to compete
effectively and our business may be adversely affected.

 We and the Portfolio Companie s
 may not be able to adequately protect our intellectual property rights throughout the world.

 Certain of our key patent families and those
of the Portfolio Companies have been filed in the United States, as well as in numerous jurisdictions outside the United States. However,
our and their intellectual property rights in certain jurisdictions outside the United States may be less robust. The laws of some foreign
countries do not protect intellectual property rights to the same extent as the laws of the United States. For example, the requirements
for patentability may differ in certain countries, particularly developing countries, and we and they may be unable to obtain issued
patents that contain claims that adequately cover or protect our current or future product candidates or device candidates, services
or technologies. Many companies have encountered significant problems in protecting and defending intellectual property rights in certain
foreign jurisdictions. The legal systems of some countries, particularly developing countries, do not favor the enforcement of patents
and other intellectual property protection, especially those relating to life sciences. This could make it difficult for us to stop the
infringement of our and their patents or the misappropriation of our other intellectual property rights. For example, many foreign countries
have compulsory licensing laws under which a patent owner must grant licenses to third parties. In addition, many countries limit the
enforceability of patents against third parties, including government agencies or government contractors. In these countries, patents
may provide limited or no benefit.

 Proceedings to enforce our and their patent rights
in foreign jurisdictions, whether or not successful, could result in substantial costs and divert our efforts and attention from other
aspects of our business. Furthermore, while we intend to protect our and their intellectual property rights in our expected significant
markets, we cannot ensure that we will be able to initiate or maintain similar efforts in all jurisdictions in which we may wish to market
current or future product candidates or device candidates. Consequently, we and the Portfolio Companies may not be able to prevent third
parties from practicing our technology in all countries outside the United States, or from selling or importing products made using our
technology in and into those other jurisdictions where we do not have intellectual property rights. Competitors may use our and their
technologies in jurisdictions where we have not obtained patent protection to develop such competitors' own products and may also
export infringing products to territories where we have patent protection, but where enforcement is not as strong as that in the United
States. These products may compete with our and their product candidates or device candidates, and our patents or other intellectual
property rights may not be effective or sufficient to prevent such competitors from competing. Accordingly, our and their efforts to
protect our intellectual property rights in such countries may be inadequate. In addition, changes in the law and legal decisions by
courts in the United States and foreign countries may affect our and their ability to obtain and enforce adequate intellectual property
protection for our product candidates, device candidates, services, and technologies.

 We and the Portfolio Companies may not
identify relevant third-party patents or may incorrectly interpret the relevance, scope or expiration of a third-party patent, which
might adversely affect our ability to develop and market our product candidates or device candidates.

 We cannot guarantee that any of our or our licensors'
patent searches or analyses, or those of the Portfolio Companies, including the identification of relevant patents, the scope of patent
claims or the expiration of relevant patents, are complete or thorough, nor can we be certain that we or they have identified each and
every third-party patent and pending application in the United States and abroad that is relevant to or necessary for the commercialization
of our product candidates or device candidates. For example, U.S. patent applications filed before November 29, 2000 and certain U.S.
patent applications filed after that date that will not be filed outside the United States remain confidential until patents issue. Patent
applications in the United States and elsewhere are published approximately 18 months after the earliest filing for which priority is
claimed, with such earliest filing date being commonly referred to as the priority date. Therefore, patent applications covering our
and their product candidates or device candidates could have been filed by others without our knowledge. Additionally, pending patent
applications that have been published can, subject to certain limitations, be later amended in a manner that could cover our or their
product candidates, device candidates, or the use of our products. The scope of a patent claim is determined by an interpretation of
the law, the written disclosure in a patent, and the patent's prosecution history. Our and their interpretation of the relevance
or the scope of a patent or a pending application may be incorrect, which may negatively impact our ability to market our product candidates
or device candidates. We and they may incorrectly determine that our product candidates or device candidates are not covered by a third-party
patent or may incorrectly predict whether a third party's pending patent application will issue with claims of relevant scope.
Our and their determination of the expiration date of any patent in the United States or abroad that we consider relevant may be incorrect,
which may negatively impact our ability to develop and market our product candidates and device candidates. Our and their failure to
identify and correctly interpret relevant patents may negatively impact our ability to develop and market our product candidates and
device candidates.

 If we and the Portfolio Companies fail to identify
and correctly interpret relevant patents, we may be subject to infringement claims. We and they cannot guarantee that we will be able
to successfully settle or otherwise resolve such infringement claims. If we or they fail in any such dispute, in addition to being forced
to pay damages, we may be temporarily or permanently prohibited from commercializing any of our product candidates or device candidates
that are held to be infringing. We and they might, if possible, also be forced to redesign products, product candidates, devices, device
candidates, or services so that we no longer infringe the third-party intellectual property rights. Any of these events, even if we or
they were ultimately to prevail, could require us and them to divert substantial financial and management resources that we would otherwise
be able to devote to our business.

 Patent terms may be inadequate to protect
our competitive position and that of the Portfolio Companies on our product candidates or device candidates for an adequate amount of
time.

 Patents have a limited lifespan, and the protection
patents afford is limited. In the United States, if all maintenance fees are timely paid, the natural expiration of a patent is generally
20 years from its earliest U.S. non-provisional filing date. Even if patents covering our product candidates and device candidates and
those of the companies we hold interests are obtained, once the patent life has expired for patents covering a product or product candidate,
a device or a device candidate, we and the Portfolio Companies may be subject to competition from competitive products and services.
As a result, our and their patent portfolio may not provide us with sufficient rights to exclude others from commercializing products
similar or identical to ours.

 Intellectual property rights do not necessarily
address all potential threats to our business.

 While we and the Portfolio Companies seek broad
coverage under our existing patent applications, there is always a risk that an alteration to products or processes may provide a sufficient
basis for a competitor to avoid infringing our patent claims. In addition, patents, if granted, expire and we and they cannot provide
any assurance that any potentially issued patents will adequately protect our product candidates or device candidates. Once granted,
patents may remain open to invalidity challenges including opposition, interference, re-examination, post-grant review, inter partes
review, nullification or derivation action in court or before patent offices or similar proceedings for a given period after allowance
or grant, during which time third parties can raise objections against such grant. In the course of such proceedings, which may continue
for a protracted period of time, the patent owner may be compelled to limit the scope of the allowed or granted claims thus attacked
or may lose the allowed or granted claims altogether.

 In addition, the degree of future protection
afforded by our intellectual property rights and those of the Portfolio Companies is uncertain because even granted intellectual property
rights have limitations, and may not adequately protect our business, provide a lawful barrier to entry against our competitors or potential
competitors or permit us to maintain our competitive advantage. Moreover, if a third party has intellectual property rights that cover
the practice of our or their processes or technologies, we may not be able to fully exercise or extract value from our intellectual property
rights. The following examples are illustrative:

 others may be able to develop and/or
 practice processes or technologies that are similar to our or their processes or technologies
 or aspects of our processes or technologies, but that are not covered by the claims of the
 patents that we or they own or control, assuming such patents have issued or do issue;

 we or our licensors or any future
 strategic partners might not have been the first to conceive or reduce to practice the inventions
 covered by the issued patents or pending patent applications that we own or have exclusively
 licensed;

 we or our licensors or any future
 strategic partners might not have been the first to file patent applications covering certain
 of our inventions;

 others may independently develop
 similar or alternative processes or technologies or duplicate any of our processes or technologies
 without infringing our intellectual property rights;

 it is possible that our or their
 pending patent applications will not lead to issued patents;

 issued patents that we own or have
 exclusively licensed may not provide us with any competitive advantage, or may be held invalid
 or unenforceable, as a result of legal challenges by our competitors or other third parties;

 our competitors might conduct research
 and development activities in countries where we do not have patent rights and then use the
 information learned from such activities to develop competitive products for sale in our
 major commercial markets;

 third parties performing manufacturing
 or testing for us using our product candidates or device candidates, including our processes
 and technologies, could use the intellectual property of others without obtaining a proper
 license;

 parties may assert an ownership
 interest in our intellectual property and, if successful, such disputes may preclude us from
 exercising exclusive rights over that intellectual property;

 we may not develop or in-license
 additional proprietary technologies that are patentable;

 we may not be able to obtain and
 maintain necessary licenses on commercially reasonable terms, or at all; and

 the patents of others may have an
 adverse effect on our business.

 Should any of these events occur, they could
have a material adverse effect on our business, financial condition, results of operations and prospects.

 We and the Portfolio Companies may be subject
to claims that our employees, consultants or independent contractors have wrongfully used or disclosed confidential information of their
former employers or other third parties.

 We and the Portfolio Companies do and may employ
individuals who were previously employed at universities or other biopharmaceutical companies, including our licensors, competitors or
potential competitors. Although we try to ensure that our employees, consultants, and independent contractors do not use the proprietary
information or know-how of others in their work for us, and we are not currently subject to any claims that our employees, consultants
or independent contractors have wrongfully used or disclosed confidential information of third parties, we may in the future be subject
to such claims.

 Litigation may be necessary to defend against
these claims. If we and the Portfolio Companies fail in defending any such claims, in addition to paying monetary damages, we may lose
valuable intellectual property rights or personnel. Such intellectual property rights could be awarded to a third party, and we could
be required to obtain a license from such third party to commercialize our processes, technologies, product candidates or device candidates.
Such a license may not be available on commercially reasonable terms or at all. Even if we are successful in defending against such claims,
litigation could result in substantial costs and be a distraction to management and other employees and could result in customers seeking
other sources for the technologies or processes or ceasing from doing business with us.

 Our intellectual property agreements with
third parties, and those of the Portfolio Companies, may be subject to disagreements over contract interpretation, which could narrow
the scope of our rights to the relevant intellectual property or technology.

 Certain provisions in our intellectual property
agreements and those of the Portfolio Companies may be susceptible to multiple interpretations. The resolution of any contract interpretation
disagreement that may arise could affect the scope of our and their rights to the relevant intellectual property or technology, or affect
financial or other obligations under the relevant agreement, either of which could have a material adverse effect on our business, financial
condition, results of operations and prospects.

 In addition, while we and the Portfolio Companies
typically require our employees, consultants and contractors who may be involved in the conception or development of intellectual property
to execute agreements assigning such intellectual property to us, we may be unsuccessful in executing such an agreement with each party
who in fact conceives or develops intellectual property that we regard as our own. To the extent that we or they fail to obtain such
assignments, such assignments do not contain a self-executing assignment of intellectual property rights or such assignment agreements
are breached, we may be forced to bring claims against third parties, or defend claims they may bring against us, to determine the ownership
of what we regard as our intellectual property, and this may interfere with our ability to capture the commercial value of such intellectual
property. If we or they fail in prosecuting or defending any such claims, in addition to paying monetary damages, we may lose valuable
intellectual property rights or personnel. Such intellectual property rights could be awarded to a third party, and we or they could
be required to obtain a license from such third party to commercialize our technology or products. Such a license may not be available
on commercially reasonable terms or at all. Even if we and they are successful in prosecuting or defending against such claims, litigation
could result in substantial costs and be a distraction to our management and scientific personnel. Disputes regarding ownership or inventorship
of intellectual property can also arise in other contexts, such as collaborations and sponsored research. We and they may be subject
to claims that former collaborators or other third parties have an ownership interest in our patents or other intellectual property.
If we or they are subject to a dispute challenging our rights in or to patents or other intellectual property, such a dispute could be
expensive and time-consuming and distract our management and other employees. If we or they are unsuccessful, we could lose valuable
rights in intellectual property that we regard as our own.

 We and the Portfolio Companies may not
be successful in obtaining necessary intellectual property rights to future products through acquisitions and in-licenses.

 Although we and the Portfolio Companies intend
to develop products and technology through our own internal research, we may also seek to acquire or in-license technologies to grow
our product offerings and technology portfolio. However, we or they may be unable to acquire or in-license intellectual property rights
relating to, or necessary for, any such products or technology from third parties on commercially reasonable terms or at all. In that
event, we or they may be unable to develop or commercialize such products or technology. We may also be unable to identify products or
technology that we believe are an appropriate strategic fit for our Company and protect intellectual property relating to, or necessary
for, such products and technology.

 The in-licensing and acquisition of third-party
intellectual property rights for product candidates and device candidates is a competitive area, and a number of more established companies
are also pursuing strategies to in-license or acquire third-party intellectual property rights for products that we may consider attractive
or necessary. These established companies may have a competitive advantage over us and the Portfolio Companies due to their size, cash
resources, and greater clinical development and commercialization capabilities. Furthermore, companies that perceive us or them to be
a competitor may be unwilling to assign or license rights to us. If we or they are unable to successfully obtain rights to additional
technologies or products, our business, financial condition, results of operations and prospects for growth could suffer.

 In addition, we expect that competition for the
in-licensing or acquisition of third-party intellectual property rights for products and technologies that are attractive to us may increase
in the future, which may mean fewer suitable opportunities for us as well as higher acquisition or licensing costs. We and the Portfolio
Companies may be unable to in-license or acquire the third-party intellectual property rights for products or technology on terms that
would allow us to make an appropriate return on our investment.

 Risks Related to Employee Matters, Managing
Our Growth, and Other Risks Related to Our Business

 Our success is highly dependent on our
ability to attract and retain highly skilled executive officers and employees.

 To succeed, we must recruit, retain, manage,
and motivate qualified clinical, scientific, technical, and management personnel, and we face significant competition for experienced
personnel. We are highly dependent on the principal members of our management and scientific and medical staff, including Cyclo management
team, and our ability to advance the development, clinical testing, regulatory approval of our lead candidate, Trappsol
Cyclo may be materially and adversely affected if we lose them. If we do not succeed in attracting and retaining qualified personnel,
particularly at the management level, it could adversely affect our ability to execute our business plan and harm our operating results.
In particular, the loss of one or more of our executive officers could be detrimental to us if we cannot recruit suitable replacements
in a timely manner. The competition for qualified personnel in the biopharmaceutical field is intense and, as a result, we may be unable
to continue to attract and retain qualified personnel necessary for the future success of our business. We could in the future have difficulty
attracting experienced personnel to our company and may be required to expend significant financial resources in our employee recruitment
and retention efforts.

 Many of the other biopharmaceutical companies
that we compete against for qualified personnel have greater financial and other resources, different risk profiles, and a longer history
in the industry than we do. They also may provide more diverse opportunities and better prospects for career advancement. Some of these
characteristics may be more appealing to high-quality candidates than what we have to offer. If we are unable to continue to attract
and retain high-quality personnel, the rate and success at which we can discover, develop, and commercialize our product candidates and
device candidates will be limited, and the potential for successfully growing our business will be harmed.

 The requirements of being a public company
may strain our resources, result in more litigation, and divert management's attention.

 As a public company, we are and will continue
to be subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act, the Sarbanes-Oxley
Act of 2002, or the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Dodd-Frank Act, the listing
requirements of Nasdaq, and other applicable securities rules and regulations. Complying with these rules and regulations has increased
and will continue to increase our legal and financial compliance costs, make some activities more difficult, time consuming or costly,
and increase demand on our systems and resources. The Exchange Act requires, among other things, that we file annual, quarterly, and
current reports with respect to our business and operating results. The Sarbanes-Oxley Act requires, among other things, that we maintain
effective disclosure controls and procedures and internal controls over financial reporting. We are required to disclose changes made
in our internal controls over financial reporting on a quarterly basis. In order to maintain and, if required, improve our disclosure
controls and procedures and internal controls over financial reporting to meet this standard, significant resources and management oversight
may be required. As a result, management's attention may be diverted from other business concerns, which could adversely affect
our business and operating results. We may also need to hire additional employees or engage outside consultants to comply with these
requirements, which will increase our costs and expenses.

 In addition, changing laws, regulations and standards
relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial
compliance costs, and making some activities more time consuming. These laws, regulations, and standards are subject to varying interpretations,
in many cases due to their lack of specificity and, as a result, their application in practice may evolve over time as new guidance is
provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs
necessitated by ongoing revisions to disclosure and governance practices. We have invested and intend to continue to invest in resources
to comply with evolving laws, regulations, and standards, and this investment may result in increased general and administrative expenses
and a diversion of management's time and attention from revenue-generating activities to compliance activities. If our efforts
to comply with new laws, regulations, and standards differ from the activities intended by regulatory or governing bodies due to ambiguities
related to their application and practice, regulatory authorities may initiate legal proceedings against us and our business may be adversely
affected.

 These new rules and regulations may make it more
expensive for us to obtain director and officer liability insurance and, during certain periods, including currently, we may utilize
alternatives for such coverage, accept reduced coverage or incur substantially higher costs to obtain coverage. These factors could also
make it more difficult for us to attract and retain qualified members of our board of directors, particularly to serve on our audit committee
and compensation committee, and qualified executive officers. By disclosing information in filings required of us as a public company,
our business and financial condition will continue to become more visible, which we believe may result in threatened or actual litigation,
including by competitors and other third parties. If those claims are successful, our business could be seriously harmed. Even if the
claims do not result in litigation or are resolved in our favor, the time and resources needed to resolve them could divert our management's
resources and seriously harm our business.

 If we fail to implement and maintain an
effective system of internal controls, we may be unable to accurately report our results of operations, meet our reporting obligations
or prevent fraud. As a result, stockholders could lose confidence in our financial and other public reporting, which would harm our business
and the trading price of our common stock.

 Effective internal controls over financial reporting
are necessary for us to provide reliable financial reports and, together with adequate disclosure controls and procedures, are designed
to prevent fraud. Any failure to implement required new or improved controls, or difficulties encountered in their implementation, could
cause us to fail to meet our reporting obligations. In addition, any testing by us conducted in connection with Section 404 of the Sarbanes-Oxley
Act of 2002, or Section 404, or any subsequent testing by our independent registered public accounting firm, may reveal deficiencies
in our internal controls over financial reporting that are deemed to be material weaknesses or that may require prospective or retroactive
changes to our financial statements or identify other areas for further attention or improvement. Inferior internal controls could also
cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of
our stock.

 We are required to disclose changes made in our
internal controls and procedures on a quarterly basis and to disclose any changes and material weaknesses in those internal controls.
A material weakness is a deficiency, or a combination of deficiencies, in internal controls over financial reporting, such that there
is a reasonable possibility that a material misstatement of the company's annual or interim financial statements will not be prevented
or detected on a timely basis. We identified a material weakness in internal control in fiscal 2025 and have identified other (since
remediated) material weaknesses in prior periods.

 We cannot be certain that we will continue to
maintain an effective system of internal controls over our financial reporting in future periods. Any failure to maintain such internal
controls could adversely impact our ability to report our financial results on a timely and accurate basis. If our financial statements
are not accurate, investors may not have a complete understanding of our operations. Likewise, if our financial statements are not filed
on a timely basis as required by the Securities and Exchange Commission and The New York Stock Exchange, we could face severe consequences
from those authorities. In either case, there could result a material adverse effect on our business. Inferior internal controls could
also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price
of our stock.

 We have identified material weaknesses
in our internal controls over financial reporting.

 Maintaining effective internal controls over
financial reporting is necessary for us to produce reliable financial statements.

 In the past, we have identified material weaknesses
in our internal controls over financial reporting which have since been remediated. Following the Merger with Cyclo on March 25, 2025,
we identified a material weakness in Cyclo's internal controls over financial reporting related to the completeness and accuracy
of accruals and expense recognition, including but not limited to clinical trial accruals, due to inadequately designed controls around
the month-end accrual identification, measurement, and recognition process.

 If additional material weaknesses in our internal
controls over financial reporting are discovered or occur in the future, our consolidated financial statements may contain material misstatements
and we could be required to restate our financial results.

 Conditions in Israel, including the October
7, 20 23 a ttack by Hamas and other terrorist organizations from the Gaza Strip and Israel's war against them, may
adversely affect our operations adversely affect operations and financial condition, particularly given the impact of the war in Gaza,
the June 2025 '12-Day War' between Israel and Iran, broader regional instability, and potential long-term impacts on Israel's economy,
technology sector, and foreign investment.

 Political, economic and military conditions in
and surrounding Israel, including the war in Gaza, the June 2025 '12-Day War' between Israel and Iran and related cross-border
hostilities involving Hezbollah in Lebanon and Houthi militants in Yemen, may materially and adversely affect our business, operations
and financial condition. A portion of our personnel and operations are located in Israel; accordingly, regional instability and escalation
directly affect our people, facilities, vendors and service continuity (including potential airspace or infrastructure disruptions, cyberattacks,
electricity or network interruptions, impaired logistics, or temporary office closures). Even though a cease fire has been reached in
the conflict between Israel and groups in Gaza, that cease fire is fragile, subject to violations and may not hold or lead to a longer
term arrangement. Israeli reserve-duty mobilizations may require some employees or contractors to serve for extended periods, which can
delay product development, reduce support capacity and impact hiring and retention. Certain of our employees and consultants in Israel,
in addition to employees of our service providers located in Israel, have been called for service in the Gaza was as, and such persons
may be absent for an extended period of time. As a result, operations of LipoMedix and Day Three may be disrupted by such absences, which
may materially and adversely affect their business and results of operations.

 The security situation can also impair domestic
demand, international travel, partner engagement and supplier reliability, and may increase insurance costs or leave certain risks uninsurable.
Broader macroeconomic effects, such as currency volatility, higher risk premia, capital-market dislocation, sanctions or trade restrictions,
and shifts in advertiser or consumer spending, could further pressure our results. Although ceasefires have occurred, cross-border rocket,
drone and missile activity has persisted intermittently, and future flare-ups or a wider regional conflict (including renewed hostilities
with Iran or coordinated attacks by Iran-aligned groups) could occur without notice. Any of these developments, together or separately,
could disrupt our operations, harm our ability to execute our strategy, increase costs, delay initiatives, or otherwise negatively affect
our business, results of operations, cash flows and financial condition.

 Prior to the Hamas attack in October 2023, the
Israeli government pursued extensive changes to Israel's judicial system, which sparked extensive political debate, mass protests,
and civil unrest. In response to such initiative, many individuals, organizations and institutions, both within and outside of Israel,
have voiced concerns that the proposed changes may negatively impact the business environment in Israel including due to reluctance of
foreign investors to invest or transact business in Israel as well as to increased currency fluctuations, downgrades in credit rating,
increased interest rates, increased volatility in security markets, and other changes in macroeconomic conditions. The risk of such negative
developments has increased in light of the war with Hamas. To the extent that any of these negative developments do occur, they may have
an adverse effect on our business and our results of operations.

 In addition, recent political uprisings and conflicts
in various countries in the Middle East, including Syria and Lebanon, are affecting the political stability of those countries. In addition,
the ongoing threats that Iran and various extremist groups in the region make against Israel may escalate in the future and turn violent,
which could affect the Israeli economy in general and us in particular. Any armed conflicts, terrorist activities or political instability
in the region could adversely affect business conditions, harm our results of operations and make it harder for us to raise capital.

 For the most part, we do not have commercial
insurance that cover losses that may occur as a result of an event associated with the security situation in Israel. Although the Israeli
government has in the past covered the reinstatement value of certain damages that were caused by terrorist attacks or acts of war, we
cannot assure you that this government coverage will be maintained or, if maintained, will be sufficient to compensate us fully for damages
incurred. Any losses or damages incurred would likely cause a significant disruption in our employees' lives and possibly put their
lives at risk, which would have a material adverse effect on our operations. Any armed conflicts or political instability in the region
would likely negatively affect business conditions generally and could harm our results of operations.

 Additionally, in the past, the State of Israel
and Israeli companies have been subjected to economic boycotts. Several countries still restrict business with the State of Israel and
with Israeli companies. These restrictive laws and policies may have an adverse impact on our results of operations, financial conditions
or the expansion of our business. A campaign of boycotts, divestment and sanctions has been undertaken against Israel, which could also
adversely impact our business.

 The relationships between Howard S. Jonas
other companies, including and IDT Corporation and Genie Energy, could conflict with our stockholders' interests.

 Howard S. Jonas, Chairman of our Board of Directors,
Chief Executive Officer, and Executive Chairman, is also the chairman of IDT Corporation and Genie Energy Ltd. and serves in other capacities
with other companies. These relationships may cause a conflict of interest with our stockholders.

 Insurance policies are expensive and protect
us only from some business risks, which leaves us exposed to uninsured liabilities.

 Some of the insurance policies we currently maintain,
or which we have maintained in the past, include general liability, employment practices liability, property, product liability, workers'
compensation, umbrella, and directors' and officers' insurance. These policies may not adequately cover all categories of
risk that our business may encounter.

 Any additional product liability insurance coverage
inclusive of the product liability and building contents coverage held by Cyclo, we acquire in the future may not be sufficient to reimburse
us for any expenses or losses we may suffer. Moreover, insurance coverage is becoming increasingly expensive and, in the future, we may
not be able to maintain insurance coverage at a reasonable cost or in sufficient amounts to protect us against losses due to liability.
If we obtain regulatory approval or clearance for any of the Portfolio Companies' product candidates or device candidates, we intend
to acquire insurance coverage to include the sale of commercial products; however, we may be unable to obtain product liability insurance
on commercially reasonable terms or in adequate amounts. A successful product liability claim or series of claims brought against us
could cause our share price to decline and, if judgments exceed our insurance coverage, could adversely affect our results of operations
and business, including preventing or limiting the development and commercialization of any product candidates or device candidates we
develop. We may not carry adequate specific biological or hazardous waste insurance coverage, and our property, casualty, and general
liability insurance policies specifically exclude coverage for damages and fines arising from biological or hazardous waste exposure
or contamination. Accordingly, in the event of contamination or injury, we could be held liable for damages or be penalized with fines
in an amount exceeding our resources, and our clinical trials or regulatory approvals and clearances, if any, could be suspended or withdrawn.

 We also expect that operating as a public company
will make it more difficult and more expensive for us to obtain director and officer liability insurance, and, during certain periods,
including currently, we may utilize alternatives for such coverage, accept reduced policy limits and coverage or incur substantially
higher costs to obtain the same or similar coverage. As a result, it may be more difficult for us to attract and retain qualified people
to serve on our board of directors, our board committees or as executive officers. We do not know, however, if we will be able to maintain
existing insurance with adequate levels of coverage. Any significant uninsured liability may require us to pay substantial amounts, which
would adversely affect our cash position and results of operations.

 We rely significantly on information technology
and any failure, inadequacy, interruption or security lapse of that technology, including any cybersecurity incidents, could harm our
ability to operate our business and that of the Portfolio Companies effectively.

 We and the Portfolio Companies and our and their
other third-party vendors and collaborators receive, collect, process, use and store a large amount of information, including personal
information, intellectual property, protected health and other sensitive and confidential information. This data is often accessed through
transmissions over public and private networks, including the internet. The secure transmission of such information over the internet
and other mechanisms is essential to maintain confidence in our and their information technology systems yet is vulnerable to unauthorized
access and disclosure. We have implemented security measures, technical controls and contractual precautions designed to identify, detect
and prevent unauthorized access, alteration, use or disclosure of data. We may face increased cybersecurity risks due to our reliance
on internet technology and the number of employees who are working remotely, which may create additional opportunities to exploit vulnerabilities.
Beyond external activity, systems that access or control access to services and databases may be compromised as a result of human error,
fraud or malice on the part of employees or third parties, or may result from accidental technological failure. Because the techniques
used to circumvent security systems can be highly sophisticated and change frequently, often are not recognized until launched against
a target, and may originate from less regulated and remote areas around the world, we may be unable to proactively address all possible
threats or implement adequate preventive measures for all situations.

 Despite the implementation of security measures,
our and the Portfolio Companies' internal computer systems and those of other third parties with which we and the Portfolio Companies
collaborate and contract are vulnerable to attempted breaches of security, unauthorized disclosure of information, attacks which reduce
availability of systems such as denial of service, damage from cyber-attacks, computer viruses, unauthorized access, natural disasters,
terrorism, war, telecommunication and electrical failures, and the perception that personal and/or other sensitive or confidential information
in our possession is not secure. System failures, accidents or security breaches could cause interruptions in our and the Portfolio Companies'
operations and could result in a material disruption of our and their clinical and commercialization activities and business operations,
in addition to possibly requiring substantial expenditures of resources to remedy. The loss of clinical trial data could result in delays
in the Portfolio Companies' regulatory approval and clearance efforts and significantly increase their costs to recover or reproduce
the data and pursue regulatory approval or clearance. To the extent that any disruption or security breach were to result in a loss of,
or damage to, our or the Portfolio Companies' data or applications, or inappropriate disclosure of confidential or proprietary
information or protected health or personal information, we and the Portfolio Companies could incur substantial legal liability or significant
harm to our reputation, and our and their product research, development, and commercialization efforts could be delayed.

 We and the Portfolio Companies and our third-party
providers and business partners face risks related to the protection of information that we maintain—or for which a third-party
engaged to maintain information security on our behalf—including unauthorized access, acquisition, use, disclosure, or modification
of such information. Cyberattacks are increasing in their frequency, sophistication and intensity and have become increasingly difficult
to detect and respond to. Cyberattacks could include the deployment of harmful malware, ransomware, denial-of-service attacks, social
engineering and other means to affect service reliability and threaten the confidentiality, integrity and availability of information.
The techniques used in these attacks change frequently and may be difficult to detect for periods of time, and we may face difficulties
in anticipating and implementing adequate preventative measures. A material cyberattack or security incident could cause interruptions
in our or their operations and could result in a material disruption of our or their business operations, damage to our or their reputation,
financial condition, results of operations, cash flows and prospects.

 Furthermore, we, the Portfolio Companies and
our third-party providers and business partners rely on electronic communications and information systems to conduct our operations.
We and our third-party providers have been, and may continue to be, targeted by parties using fraudulent e-mails and other communications
in attempts to misappropriate bank accounting information, passwords, or other personal information or to introduce viruses or other
malware to our information systems. In October 2021, we experienced a cybersecurity incident where a related party's email was
hacked which led to payment of two invoices. As of the date of this filing, one of the invoice payments had been recovered by the Company.
We continue to explore a range of steps to enhance our security protections and prevent future unauthorized activity.

 Although we endeavor to mitigate these threats,
such cyber-attacks against us, the Portfolio Companies or our third-party providers and business partners remain a serious issue. The
pervasiveness of cybersecurity incidents in general and the risks of cyber-crime are complex and continue to evolve. Although we are
making significant efforts to maintain the security and integrity of our information systems and are exploring various measures to manage
the risk of a security breach or disruption, there can be no assurance that our security efforts and measures will be effective or that
attempted security breaches or disruptions would not be successful or damaging.

 Our insurance policies may not be adequate to
compensate us for the potential losses arising from any such disruption, failure or security breach. In addition, such insurance may
not be available to us in the future on economically reasonable terms, or at all. Further, our insurance may not cover all claims made
against us and could have high deductibles in any event, and defending a suit, regardless of its merit, could be costly and divert management
attention.

 Risks Related to Ownership of our Common
Stock

 We do not currently intend to pay dividends
on our common stock and, consequently, your ability to achieve a return on your investment will depend on appreciation of the value of
our common stock.

 We have never declared or paid any cash dividends
on our equity securities. We currently anticipate that we will retain future earnings for the development, operation and expansion of
our business and do not anticipate declaring or paying any cash dividends for the foreseeable future. Any return to stockholders will
therefore be limited to any appreciation in the value of our common stock, which is not certain.

 We are controlled by our principal stockholder,
which limits the ability of other stockholders to affect the management of the Company.

 Howard S. Jonas, our Chairman of our Board of Directors, Chief Executive
Officer and our Executive Chairman, controls a majority of the voting power of our capital stock. As of October 27, 2025, Mr. Jonas has
voting power over 787,163 shares of our Class A common stock (which are convertible into shares of our Class B common stock on a 1-for-1
basis) and 14,010,522 shares of our Class B common stock, representing approximately 51% of the combined voting power of our outstanding
capital stock. Mr. Jonas will be able to control matters requiring approval by our stockholders, including the election of all of the
directors and the approval of significant corporate matters, including any merger, consolidation or sale of all or substantially all of
our assets. As a result, the ability of any of our other stockholders to influence our management is limited.

 Sales of a substantial number of shares of our common stock
in the public market could cause our stock price to fall.

 Sales of a substantial number of shares of our
common stock in the public market, or the perception in the market that the holders of a large number of shares of common stock intend
to sell shares, could reduce the market price of our common stock. Outstanding shares of our common stock may be freely sold in the public
market at any time to the extent permitted by Rules 144 and 701 under the Securities Act, or to the extent that such shares have already
been registered under the Securities Act and are held by non-affiliates of ours. Moreover, holders of a substantial number of shares
of our common stock have rights, subject to certain conditions, to require us to file registration statements covering their shares or
to include their shares in registration statements that we may file for ourselves or other stockholders. We also have registered all
shares of common stock that we may issue under our equity compensation plans or that are issuable upon exercise of outstanding options.
These shares can be freely sold in the public market upon issuance, and once vested, are not subject to volume limitations applicable
to affiliates. If any of these additional shares are sold, or if it is perceived that they will be sold, in the public market, the market
price of our common stock could decline.

 We are a "smaller reporting company," and the reduced
disclosure requirements applicable to smaller reporting companies may make our common stock less attractive to investors.

 We are considered a "smaller reporting
company." We are therefore entitled to rely on certain reduced disclosure requirements, such as an exemption from providing selected
financial data and executive compensation information. These exemptions and reduced disclosures in our SEC filings due to our status
as a smaller reporting company may make it harder for investors to analyze our results of operations and financial prospects. We cannot
predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common
stock less attractive as a result, there may be a less active trading market for our common stock and our stock prices may be more volatile.

 General Risk Factors

 If we are unable to successfully integrate
Cyclo's team and operation with ours, we would not be able to fully realize the benefits of the Merger and our operations and financial
condition could be adversely affected.

 We completed the Merger with Cyclo in March 2025 and our primary focus
is on continuing and completing their development program for Trappsol Cyclo. We need to integrate Cyclo's management
team and operations with our own in order to maximize the chances of success and to fully realize the benefits of the Merger. Failure
to do so could have material adverse effects on our financial conditions and operations, including increased operating expenses, diversion
of management's attention, retention of existing employees and regulatory risks.

 If we engage in future acquisitions or
strategic collaborations, this may increase our capital requirements, dilute our stockholders, cause us to incur debt or assume contingent
liabilities, and subject us to other risks.

 From time to time, we may evaluate various acquisition
opportunities and strategic collaborations, including licensing or acquiring complementary products, intellectual property rights, technologies
or businesses. Any potential acquisition or strategic partnership may entail numerous risks, including:

 increased operating expenses and
 cash requirements;

 the assumption of additional indebtedness
 or contingent liabilities;

 the issuance of our equity securities;

 assimilation of operations, intellectual
 property and products of an acquired company, including difficulties associated with integrating
 new personnel;

 the diversion of our management's
 attention from our existing programs and initiatives in pursuing such a strategic merger
 or acquisition;

 retention of key employees, the
 loss of key personnel and uncertainties in our ability to maintain key business relationships;

 risks and uncertainties associated
 with the other party to such a transaction, including the prospects of that party and their
 existing products or product candidates, devices or device candidates, and any regulatory
 approvals or clearances;

 assumption of the regulatory risks,
 costs, and responsibilities associated with the other party's existing products or
 product candidates, devices or device candidates, and any regulatory approvals or clearances;
 and

 our inability to generate revenue
 from acquired technology and/or products sufficient to meet our objectives in undertaking
 the acquisition or even to offset the associated acquisition and maintenance costs. In addition,
 if we undertake acquisitions or pursue collaborations in the future, we may issue dilutive
 securities, assume or incur debt obligations, incur large one-time expenses and acquire intangible
 assets that could result in significant future amortization expense. Moreover, we may not
 be able to locate suitable acquisition opportunities, and this inability could impair our
 ability to grow or obtain access to technology or products that may be important to the development
 of our business.

 Investors may suffer dilution.

 We may engage in equity financing to fund our
future operations and growth or issue equity securities in commercial or other transactions. If we raise additional funds by issuing
equity securities, or issue equity securities for other purposes, stockholders may experience significant dilution of their ownership
interest (both with respect to the percentage of total securities held, and with respect to the book value of their securities) and such
securities may have rights senior to those of the holders of our common stock. In addition. if we do not provide our Portfolio Companies
with the capital they require, they may seek capital from other sources, which would result in dilution and possible subordination or
other diminution in value of our interests in those companies.

 The trading price of the shares of our
Class B common stock is likely to remain volatile, and purchasers of our Class B common stock could incur substantial losses.

 Our stock price is likely to remain volatile.
The stock market in general and the market for the Portfolio Companies in particular have experienced extreme volatility that has often
been unrelated to the operating performance of particular companies. As a result of this volatility, investors may not be able to sell
their Class B common stock at or above the price paid for the shares. The market price for our Class B common stock may be influenced
by many factors, including:

 actual or anticipated variations
 in quarterly operating results;

 changes in financial estimates by
 us or by any securities analysts who might cover our stock;

 conditions or trends in our industry;

 stock market price and volume fluctuations
 of other publicly traded companies and, in particular, those that operate in the real estate
 or healthcare industries;

 announcements by us or our competitors
 of preliminary or interim data from or the results of clinical trials, new product or service
 offerings, or significant acquisitions;

 strategic collaborations or divestitures;

 announcements of investigations
 or regulatory scrutiny of our operations or lawsuits filed against us;

 capital commitments;

 additions or departures of key personnel;
 and

 sales of our common stock, including
 sales by our directors and officers or specific stockholders. In addition, in the past, stockholders
 have initiated class action lawsuits against companies following periods of volatility in
 the market prices of these companies' stock. Such litigation, if instituted against
 us, could cause us to incur substantial costs and divert management's attention and
 resources.

 The realization of any of the above risks or
any of a broad range of other risks, including those described in this "Risk Factors" section, could have a dramatic and
adverse impact on the market price of our common stock.

 If securities or industry analysts do not
publish research or publish unfavorable research about our business, our stock price and trading volume could decline.

 The trading market for our common stock will
rely in part on the research and reports that equity research analysts may publish about us and our business. We do not currently have
analyst coverage and may never obtain research coverage by equity research analysts. Equity research analysts may elect not to provide
research coverage of our common stock and such lack of research coverage may adversely affect the market price of our common stock. In
the event we do have equity research analyst coverage, we will not have any control over the analysts or the content and opinions included
in their reports. The price of our stock could decline if one or more equity research analysts or others downgrade our stock or issue
other unfavorable commentary or research. If one or more equity research analysts ceases coverage of our company or fails to publish
reports on us regularly, demand for our stock could decrease, which in turn could cause our stock price or trading volume to decline.

 We may be subject to securities litigation,
which is expensive and could divert management attention.

 The market price of our common stock may be volatile
and, in the past, companies that have experienced volatility in the market price of their stock have been subject to securities class
action litigation. We may be the target of this type of litigation in the future. Securities litigation against us could result in substantial
costs and divert our management's attention from other business concerns, which could seriously harm our business.

 Item 1B. Unresolved Staff
Comments

 None.

 Item 1C. Cybersecurity

 Cybersecurity risk management and strategy

 Our cybersecurity risk management is based on
recognized cybersecurity industry frameworks and standards, including those of the National Institute of Standards and Technology, the
Center for Internet Security Controls, and the International Organization for Standardization. We use these frameworks, together with
information collected from internal assessments, to develop policies for the use of our information assets (for example, TI business
information and information resources such as mobile phones, computers and workstations), access to specific intellectual property or
technologies, and protection of personal information. We protect these information assets through industry-standard techniques, such
as multifactor authentication and malware defenses. We also work with internal stakeholders across the Company to integrate foundational
cybersecurity principles throughout our organization's operations, including the employment of multiple layers of cybersecurity
defenses, restricted access based on business needs, and integrity of our business information. Throughout the year, we also regularly
train our employees on cybersecurity awareness, confidential information protection and simulated phishing attacks.

 Our cybersecurity risk management extends to
risks associated with our use of third-party service providers. For instance, we conduct risk and compliance assessments of third-party
service providers that request access to our information assets.

 Our cybersecurity risk management is an important
part of our comprehensive business continuity program and enterprise risk management. Our global information security team periodically
 engages with a cross-functional group of subject matter experts and leaders to assess and refine our cybersecurity risk posture and preparedness.
For example, we regularly evaluate and update contingency strategies for our business in the event that a portion of our information
resources were to be unavailable due to a cybersecurity incident. We practice our response to potential cybersecurity incidents through
regular tabletop exercises, threat hunting and red team exercises.

 Governance of cybersecurity risk management

 The board of directors, as a whole, has
oversight responsibility for our strategic and operational risks. The audit committee assists the board of directors with this responsibility
by reviewing and discussing our risk assessment and risk management practices, including cybersecurity risks, with members of management.
The audit committee, in turn, periodically reports on its review with the board of directors.

 Management is responsible for day-to-day assessment
and management of cybersecurity risks and reports regularly to the audit committee.

 Item 2. Properties

 Our principal executive office is located in
520 Broad Street, Newark, New Jersey.

 See Item 1—"Real Estate" for
a discussion of properties held by the Company for investment purposes for a detailed listing of such facilities.

 Item 3. Legal Proceedings

 Legal proceedings disclosure is presented in
Note 23 to our Consolidated Financial Statements included in included in Item 8 to Part II of this Annual Report.

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

 Item 4. Mine Safety Disclosures

 Not applicable.

 Item 5. Market for Registrant's
Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 PRICE RANGE OF COMMON STOCK

 Our Class B common stock trades on the New York
Stock Exchange under the symbol "RFL." Trading commenced on the NYSE American on March 27, 2018 and on the New York Stock
Exchange on November 21, 2019. Warrants to purchase our Class B common stock trades on the NYSE American under the symbol "RFL-WT."
Trading commenced on April 1, 2025.

 On October 23, 2025, there were 289 holders of record of our Class
B common stock and one holder of record of our Class A common stock. Howard S. Jonas has voting and dispositive power over all shares
of Class A common stock. The number of holders of record of our Class B common stock does not include the number of persons whose shares
are in nominee or in "street name" accounts through brokers. On October 27, 2025, the last sales price reported on the NYSE
for the Class B common stock was $1.35 per share.

 We do not anticipate paying dividends on our
common stock unless and until we achieve sustainable profitability (after satisfying all of our operational needs) and retain certain
minimum cash reserves. Distributions will be subject to the need to retain earnings for investment in growth opportunities or the acquisition
of complementary assets. The payment of dividends in any specific period will be at the sole discretion of our Board of Directors.

 As of October 23, 2025, we had outstanding publicly-traded
Warrants to purchase an aggregate of 380,253 shares of our common stock (the "Public Warrants") at an exercise price of $14.19
per share held by [to update] holders of record. The Warrants were initially issued by Cyclo on December 11, 2020 in connection with
its underwritten public offering and, in connection with the merger with Cyclo, were automatically converted to warrants to purchase
shares of Rafael's Class B common stock with the exercise price and number of shares issuable on exercise adjusted as per the exchange
ratio used in the merger. The Public Warrants are exercisable at any time during the five years following the date of the original issuance
of the warrants to purchase Cyclo common stock, expiring at 5:00 pm EST on December 11, 2025.

 On October 27, 2025, the last sales price reported on the NYSE American
for the Public Warrants was $.08 per share.

 The information required by Item 201(d) of Regulation
S-K will be contained in our Proxy Statement for our Annual Stockholders Meeting, which we will file with the Securities and Exchange
Commission within 120 days after July 31, 2025, and which is incorporated by reference herein.

 Performance Graph of Stock

 We are a smaller reporting company as defined
by Rule 12b-2 of the Securities and Exchange Act of 1934 and are not required to provide the information under this item.

 Issuer Repurchases of Equity Securities

 None.

 Item 6. [Reserved].

 Not applicable.

 Item 7. Management's
Discussion and Analysis of Financial Condition and Results of Operations

 This Annual Report contains forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements
that contain the words "believes", "anticipates", "expects", "plans", "intends"
and similar words and phrases. These forward-looking statements are subject to risks and uncertainties that could cause actual results
to differ materially from the results projected in any forward-looking statement. In addition to the factors specifically noted in the
forward-looking statements, other important factors, risks and uncertainties that could result in those differences include, but are
not limited to, those discussed under Item 1A to Part I "Risk Factors" in this Annual Report. The forward-looking statements
are made as of the date of this Annual Report, and we assume no obligation to update the forward-looking statements, or to update the
reasons why actual results could differ from those projected in the forward-looking statements. Investors should consult all of the information
set forth in this report and the other information set forth from time to time in our reports filed with the Securities and Exchange
Commission pursuant to the Securities Act of 1933 and the Securities Exchange Act of 1934, including our reports on Forms 10-Q and 8-K.

 The following discussion should be read in conjunction
with the Consolidated Financial Statements and Notes thereto included in Item 8 of this Annual Report.

 Overview

 Rafael Holdings, Inc. ("Rafael Holdings", "Rafael",
"we" or the "Company") is a biotechnology company that develops pharmaceuticals and holds interests in clinical
and early-stage companies that develop pharmaceuticals and medical devices. Our lead candidate is Trappsol Cyclo,
which is being evaluated in clinical trials for the potential treatment of Niemann-Pick Disease Type C1 ("NPC1"), a rare,
fatal and progressive genetic disorder. We also hold: (i) a majority equity interest in LipoMedix Pharmaceuticals Ltd. ("LipoMedix"),
a clinical stage pharmaceutical company; (ii) Barer Institute Inc. ("Barer"), a wholly-owned cancer research focused entity
whose operations have been substantially curtailed; (iii) a majority interest in Cornerstone Pharmaceuticals, Inc. ("Cornerstone"),
formerly known as Rafael Pharmaceuticals Inc., a cancer metabolism-based therapeutics company; (iv) a majority interest in Rafael Medical
Devices, LLC ("Rafael Medical Devices"), an orthopedic-focused medical device company developing instruments to advance minimally
invasive surgeries; and (v) a majority interest in Day Three Labs, Inc. ("Day Three"), a company which empowers third-party
manufacturers to reimagine their existing product offerings by utilizing Day Three's technology and innovation like Unlokt.
Our primary focus has been the continued development of Trappsol Cyclo through the completion of its ongoing pivotal
Phase 3 clinical trial, the potential filing for regulatory approval and ultimately, if approved, commercialization of the product. We
also look to expand our investment portfolio through opportunistic and strategic investments including that address high unmet medical
needs. We continuously evaluate our other holdings to ensure the focus of our resources are on core assets and specifically the continued
development of Trappsol Cyclo.

 Historically, we owned real estate assets. As
of July 31, 2025, we hold a portion of a commercial building in Jerusalem, Israel as our sole remaining real estate asset.

 In May 2023, we first invested in Cyclo, a clinical-stage
biotechnology company that develops cyclodextrin-based products for the potential treatment of neurodegenerative diseases. Cyclo's
lead drug candidate is Trappsol Cyclo (hydroxypropyl beta cyclodextrin), a treatment for NPC1. NPC1 is a rare
and fatal autosomal recessive genetic disease resulting in disrupted cholesterol metabolism that impacts the brain, lungs, liver, spleen,
and other organs. In January 2017, the FDA granted Fast Track designation to Trappsol Cyclo for the treatment
of NPC1. Initial patient enrollment in the U.S. Phase I study commenced in September 2017 and in May 2020, Cyclo announced Top Line data
indicating Trappsol Cyclo was well tolerated in this study. Cyclo is currently conducting a Phase 3 Clinical Trial
evaluating Trappsol Cyclo in Pediatric and Adult Patients with Niemann-Pick Disease, Type C1. On March 25,
2025, we consummated the Merger with Cyclo whereby Cyclo became a wholly-owned subsidiary of the Company. See Note 3 to our Consolidated
Financial Statements for more information on the Merger with Cyclo.

 LipoMedix is a clinical stage company based in Israel that is focused
on the development of a product candidate that holds the potential to be an innovative, safe, and effective cancer therapy based on liposome
delivery. As of July 31, 2025, our ownership interest in LipoMedix was approximately 95%. As needed, we provide debt or equity funding
to Lipomedix to support its development and clinical efforts. LipoMedix is currently exploring strategic options for its lead candidate,
including potential licensing opportunities, collaborations with industry partners, and investigator-initiated studies.

 In 2019, we established Barer, originally as a preclinical cancer metabolism
research operation, to focus on developing a pipeline of novel therapeutic compounds, including compounds designed to regulate cancer
metabolism with potentially broader application in other indications beyond cancer. Barer was comprised of scientists and academic advisors
that are experts in cancer metabolism, chemistry, and drug development. In addition to its own internal discovery efforts, Barer pursued
collaborative research agreements and in-licensing opportunities with leading scientists from top academic institutions. Barer's
majority owned subsidiary, Farber Partners, LLC ("Farber"), was formed around one such agreement with Princeton University's
Office of Technology Licensing ("Princeton") for technology from the laboratory of Dr. Joshua Rabinowitz, in the Department
of Chemistry, Princeton University, for an exclusive worldwide license to its SHMT (serine hydroxymethyltransferase) inhibitor program.
In November 2022, we resolved to curtail our early-stage development efforts, including pre-clinical research at Barer. Since then, we
have sought partners for Farber programs and has entered into a license agreement for one of its technologies that is in the pre-clinical
research stage with the Ludwig Institute of Cancer Research and has transferred majority ownership of another one of its technologies,
SHMT, to a new company, Forme Therapeutics, that is being managed by Dr. Joshua Rabinowitz with the goal of developing SHMT. Going forward,
we expect that Barer will primarily operate as an entity holding interest in these two cancer-focused opportunities.

 We own a 37.5% equity interest in RP Finance
LLC ("RP Finance"), which was, until March 13, 2024 (the date of the RP Finance Consolidation (as described in Note 6 to
the Consolidated Financial Statements)), accounted for under the equity method. RP Finance is an entity in which vehicles associated
with members of the family of Howard S. Jonas (Executive Chairman, Chief Executive Officer, President, Chairman of the Board, and controlling
stockholder of the Company), hold an aggregate 37.5% equity interest. RP Finance holds debt and equity investments in Cornerstone. In
October 2021, Cornerstone received negative results of its Avenger 500 Phase 3 study for Devimistat in pancreatic cancer as well as a
recommendation to stop its ARMADA 2000 Phase 3 study due to a determination that the trial would be unlikely to achieve its primary endpoint
(the "Data Events"). Due to the Data Events, RP Finance fully impaired its then debt and equity investments in Cornerstone.

 On March 13, 2024, Cornerstone consummated a restructuring of its outstanding
debt and equity interests (the "Cornerstone Restructuring"). As a result of the Cornerstone Restructuring, Rafael became a
67% owner of the issued and outstanding common stock of Cornerstone (the "Cornerstone Acquisition"), and Cornerstone became
a consolidated subsidiary of Rafael. See Note 6 to the Consolidated Financial Statements for additional information on the Cornerstone
Restructuring, Cornerstone Acquisition, and RP Finance Consolidation. The Company is currently reviewing Cornerstone's current efforts,
prospects and available resources to determine its optimal operational direction.

 In May 2021, we formed Rafael Medical Devices,
an orthopedic-focused medical device company developing instruments to advance minimally invasive surgeries. In August 2023, Rafael Medical
Devices sold an aggregate 31.6% equity interest to third parties for $925,000. In February 2025, we invested approximately $582,000 in
cash, and Rafael Medical Devices raised approximately $44,000 from third parties in exchange for Rafael Medical Devices' Class A Units.
We currently hold a 73% equity interest in Rafael Medical Devices. On December 11, 2024, Rafael Medical Devices received a substantial
equivalence determination for the VECTR System from the Food and Drug Administration ("FDA") in response to Rafael Medical
Devices' 510(k) premarket notification. The FDA's clearance of the VECTR System is for use in minimally invasive ligament
or fascia release surgeries, such as carpal tunnel release in the wrist and cubital tunnel release in the elbow. The VECTR System has
been classified into Class II and is subject to special controls (performance standards). Rafael Medical Devices' development of future
products will depend upon the success of the VECTR System and our Company's ability to identify attractive opportunities in the marketplace.

 In April 2023, we first invested in Day Three, a company which empowers
third-party manufacturers to reimagine their existing product offerings enabling those third-party manufacturers to bring to market better,
cleaner, more precise and predictable versions of their products by utilizing Day Three's technology and innovation like Unlokt.
In January 2024, we entered into a series of transactions with Day Three and certain of its shareholders, acquiring a controlling interest
in Day Three and subsequently consolidating Day Three's results (the "Day Three Acquisition"). On March 14, 2025, Day Three
Labs Manufacturing, a majority owned subsidiary of Day Three, entered into an Asset Purchase Agreement and Licensing Agreement (the "DTLM
Sale Agreement"), pursuant to which they sold assets and licensed certain applications of their Unlokt technology used in
their cannabinoid ingredient manufacturing business. See Note 13 in the Notes to our Consolidated Financial Statements for additional
information.

 Results of Operations

 Our business consists of three reportable segments
- Healthcare, Infusion Technology, and Real Estate. We evaluate the performance of our 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. Accordingly, the income and expense line items below loss from operations are only included in the discussion
of consolidated results of operations.

 Healthcare segment

 Results of operations for our Healthcare segment
were as follows:

 2025

 2024

 $

 %

 Product revenue

 $

 $
 —

 $

 %

 Cost of product revenue

 (28
)

 —

 (28
)

 (100
)%

 (13,165
)

 (8,338
)

 (4,827
)

 (58
)%

 (12,568
)

 (3,668
)

 (8,900
)

 (243
)%

 In-process research and development

 —

 (89,861
)

 89,861

 %

 (48
)

 (165
)

 %

 $
 (25,294
)

 $
 (102,032
)

 $
 76,738

 %

 The Healthcare segment is comprised of the activities
of Barer, LipoMedix, Farber, Cornerstone, Cyclo, and Rafael Medical Devices. As of July 31, 2025, we held a 100% interest in Barer
and Cyclo, a 95% interest in LipoMedix, a 93% interest in Farber, a 67% interest in Cornerstone, and a 73% interest in Rafael Medical
Devices.

 Product revenue. Total revenue for the
Healthcare segment for the year ended July 31, 2025, increased to approximately $515 thousand compared to $0 for the year ended July
30, 2024. This increase is primarily due to the inclusion of product revenue generated by Cyclo following the Cyclo Merger in March 2025.

 General and administrative expenses. General
and administrative expenses consist mainly of payroll, stock-based compensation expense, benefits, facilities, consulting and professional
fees. The increase in general and administrative expenses during the year ended July 31, 2025 compared to the year ended July 31, 2024
is primarily due to the consolidation of Cyclo's general and administrative expenses, amounting to $3.6 million, following the Cyclo
Merger in March 2025. In addition, legal and other professional fees increased by $0.6 million compared to the year ended July 31, 2024,
primarily due to services related to the Cyclo Merger.

 Research and development expenses. Research
and development expenses increased for the year ended July 31, 2025 compared to the year ended July 31, 2024. Research and development
expenses are derived from activity at Cyclo, Barer, LipoMedix, Farber, Cornerstone, and Rafael Medical Devices. The increase is primarily
due to the consolidation of Cyclo's research and development expenses, amounting to $8.4 million, following the Cyclo Merger in March
2025.

 Infusion Technology segment

 Results of operations for our Infusion Technology
segment were as follows:

 2025

 2024

 $

 %

 Infusion Technology revenue

 $

 $

 $
 (262
)

 (74
)%

 Cost of Infusion Technology revenue

 (106
)

 (154
)

 %

 Loss on impairment of goodwill

 (3,050
)

 —

 (3,050
)

 (100
)%

 (320
)

 (374
)

 %

 (255
)

 (502
)

 %

 (177
)

 —

 (177
)

 (100
)%

 $
 (3,815
)

 $
 (675
)

 $
 (3,140
)

 (465
)%

 The Infusion Technology segment is comprised
of our majority equity interest in Day Three, which was acquired in January 2024. Revenues associated with the Infusion Technology segment
consist of Infusion Technology revenue derived from Day Three's Unlokt technology. Cost of Infusion Technology revenue includes supplies,
materials, production labor, and travel costs. General and administrative expenses for the Infusion Technology segment consist mainly
of payroll, insurance, software, and licenses. Research and development expenses for the Infusion Technology segment include costs related
to the development of new products and services.

a layoff within the Company's Infusion Technology segment, we concluded that a triggering event occurred during November 2024, that required
us to assess if there was an impairment under ASC 350 and ASC 360. We completed an analysis pursuant to ASC 360 and determined that the
expected undiscounted cash flows of the asset group exceeded its carrying amount, indicating that the long-lived assets were not impaired.
In accordance with ASC 350, we performed a quantitative goodwill impairment test, which indicated that the carrying amount of the reporting
unit exceeded the estimated fair value of the reporting unit, indicating that the goodwill of the reporting unit was impaired. We recorded
an impairment charge of $3.1 million related to the Infusion Technology segment's goodwill during the year ended July 31, 2025.

 On March 14, 2025, Day Three Labs Manufacturing
entered into the DTLM Sale Agreement, pursuant to which they sold assets and licensed certain applications of their Unlokt technology
used in Infusion Technology services (see Note 13 to the accompanying consolidated financial statements).

 Real Estate segment

 The Real Estate segment consists of a portion
of a commercial building in Israel. Consolidated revenue, expenses and loss for our Real Estate segment were as follows:

 2025

 2024

 $

 %

 Rental – Third Party

 $

 $

 $

 %

 Rental – Related Party

 %

 (296
)

 (142
)

 (154
)

 (108
)%

 (63
)

 (60
)

 (3
)

 (5
)%

 Income (loss) from operations

 $
 (50
)

 $

 $
 (130
)

 (163
)%

 General and administrative expenses. General
and administrative expenses consist mainly of real estate taxes, payroll, accounting and legal fees, as well as building operating and
office expenses. The increase in general and administrative expenses during the year ended July 31, 2025 compared to the year ended July
31, 2024 is primarily the result of an increase in accounting and legal fees as well as building operating expenses and office rent.

 Consolidated Operations

 Our consolidated income and expense line items
below loss from operations were as follows:

 2025

 2024

 $

 %

 $
 (29,159
)

 $
 (102,627
)

 $
 73,468

 %

 Interest income

 1,996

 2,383

 (387
)

 (16
)%

 Loss on initial investment in Day Three upon acquisition

 —

 (1,633
)

 1,633

 (100
)%

 Realized gain on available-for-sale securities

 1,772

 (1,594
)

 (90
)%

 Realized loss on investment in equity securities

 —

 (46
)

 (100
)%

 Realized gain on investment - Cyclo

 —

 (424
)

 (100
)%

 Unrealized (loss) gain on investment - Cyclo

 (5,144
)

 (5,181
)

 14,003
 %

 Unrealized (loss) gain on convertible notes receivable,
 due from Cyclo

 (719
)

 1,191

 (1,910
)

 (160
)%

 Unrealized gain on investment - Hedge Funds

 —

 (63
)

 (100
)%

 Recovery of receivables from Cornerstone

 —

 31,305

 (31,305
)

 (100
)%

 Interest expense

 (658
)

 (248
)

 (410
)

 (165
)%

 Other income, net

 %

 Loss before income taxes

 (33,196
)

 (67,261
)

 34,065

 %

 Benefit from income taxes

 2,553

 2,680

 (127
)

 (5
)%

 Equity in loss of Day Three

 —

 (422
)

 (100
)%

 Consolidated net loss

 (30,643
)

 (65,003
)

 34,360

 %

 Net loss attributable to noncontrolling interests

 (123
)

 (30,593
)

 30,470

 %

 Net loss attributable to Rafael Holdings, Inc.

 $
 (30,520
)

 $
 (34,410
)

 $
 3,890

 %

 Interest income. We recorded interest
income of $2.0 million and $2.4 million for the years ended July 31, 2025 and 2024, respectively. In November 2024, we sold our investments
in available-for-sale securities and cash equivalents to reallocate assets to better align with our strategic goals. Accordingly, interest
income has decreased due to a lower interest rate earned on these assets.

 Loss on initial investment in Day Three upon
acquisition. We recognized a loss of $0 and $1.6 million on initial investment in Day Three upon acquisition for the years ended
July 31, 2025 and 2024. In January 2024, we acquired Day Three. See Note 13 to our accompanying consolidated financial statements for
more information.

 Realized gain on available-for-sale securities.
 We recognized a realized gain of $0.2 million for the year ended July 31, 2025 related to the maturity of certain available-for-sale
securities and the sale of our available-for-sale securities in November 2024. We recognized a realized gain on available-for-sale securities
of $1.8 million for the year ended July 31, 2024, related to the sale and maturity activity.

 Unrealized (loss) gain on investment - Cyclo.
 Unrealized gains and losses on investment - Cyclo are recognized as a result of changes in the fair value of our investments in Cyclo
common stock and warrants which fluctuated due to the volatility of the market price of Cyclo common stock leading up to the Cyclo Merger.
We recorded an unrealized loss of $5.1 million during the year ended July 31, 2025, prior to the Cyclo Merger. We recorded an unrealized
gain of $37 thousand for the year ended July 31, 2024.

 Unrealized (loss) gain on convertible notes
receivable, due from Cyclo. We recorded an unrealized loss of $0.7 million for the year ended July 31, 2025, on our convertible notes
receivable, due from Cyclo. The outstanding principal and accrued interest on the Cyclo Convertible Notes were forgiven in the Cyclo
Merger.

 Unrealized gain on investment - Hedge Fund s.
We recorded an unrealized gain of approximately $63 thousand for the year ended July 31, 2024. During the year ended July 31, 2025, we
requested a withdrawal of its remaining balance in Hedge Fund Investments, and no longer hold any hedge fund investments.

 Recovery of receivables from Cornerstone Pharmaceuticals.
We recorded an increase in recovery of receivables from Cornerstone Pharmaceuticals of approximately $31.3 million for the year ended
July 31, 2024. See Note 6 to our accompanying consolidated financial statements for more information related to this matter.

 Interest expense. Interest expense was
$0.7 million and $0.2 million for the years ended July 31, 2025 and 2024, respectively. Interest expense is attributable to liabilities
assumed in the Cornerstone Acquisition in March 2024, therefore the increase during the year ended July 31, 2025 is due to a full year
of activity.

 Other income, net. Other income, net was
$0.3 million for the year ended July 31, 2025 primarily due to Cornerstone's Employee Retention Credits ("ERC") of $0.2 million
and the gain on sale of Cornerstone's IPR&D of $0.1 million. Other income, net was $0.1 million for the year ended July 31, 2024,
related primarily to the dissolution of a majority owned subsidiary.

 Equity in loss of Day Three. We recognized
a loss of $0.4 million from our ownership interest in Day Three due to operating results for the year ended July 31, 2024. As of January
2, 2024, Day Three is a majority-owned subsidiary which is consolidated.

 Net loss attributable to noncontrolling interests.
 The change in the net loss attributable to noncontrolling interests is primarily attributed to acquisition of Cornerstone and Day
Three and the consolidation of their activity.

 Liquidity and Capital Resources

 As of July 31,

 2025

 2024

 $

 %

 Balance Sheet Data:

 Cash and cash equivalents

 $
 52,769

 $
 2,675

 $
 50,094

 1873
 %

 Convertible notes receivable classified as available-for-sale

 1,858

 1,146

 %

 Installment note payable

 —

 1,700

 (1,700
)

 (100
)%

 Working capital

 45,114

 64,988

 (19,874
)

 (31
)%

 Total assets

 114,109

 96,832

 17,277

 %

 Total equity attributable to Rafael Holdings, Inc.

 94,391

 82,185

 12,206

 %

 Noncontrolling interests

 3,980

 4,073

 (93
)

 %

 Total equity

 $
 98,371

 $
 86,258

 $
 12,113

 %

 2025

 2024

 $

 %

 Cash flows (used in) provided by:

 Operating activities

 $
 (18,924
)

 $
 (7,802
)

 $
 (11,122
)

 (143
)%

 Investing activities

 44,035

 (10,820
)

 54,855

 %

 Financing activities

 24,830

 (179
)

 25,009

 13972
 %

 Effect of exchange rates on cash and cash equivalents

 (22
)

 %

 Increase (decrease) in cash and cash equivalents

 $
 50,094

 $
 (18,823
)

 $
 68,917

 (366
)%

 Capital Resources

 As of July 31, 2025, we held cash and cash
equivalents of approximately $52.8 million. We expect the balance of cash and cash equivalents to be sufficient to meet our obligations
for at least the next 12 months from the filing of this Annual Report on Form 10-K.

 Operating Activities

 For the year ended July 31, 2025, cash used in
operating activities was $18.9 million, impacted by a net loss of $30.6 adjusted for non-cash items totaling $10.9 million. Cash generated
from operating assets and liabilities included the collection of interest receivables of $0.5 million and a decrease in prepaid expenses
and prepaid clinical costs of $0.9 million.

 For the year ended July 31, 2024, cash used in
operating activities was $7.8 million, impacted by a net loss of $65.0 adjusted for non-cash items totaling $57.8 million. Cash used
from operating assets and liabilities included the addition of $150 thousand of accounts receivable and $139 thousand of interest receivables,
plus a decrease of accounts payable and accrued expenses of $146 thousand.

 Investing Activities

 Cash provided by investing activities for the
year ended July 31, 2025 was primarily due to proceeds of $80.7 million from sales and maturities of available-for-sale securities and
$2.5 million in proceeds from hedge funds, offset by purchases of available-for-sale securities of approximately $17.0 million, purchases
of $19.5 million in convertible notes receivable, due from Cyclo, and net cash used in the Cyclo Merger of 2.7 million.

 Cash used in investing activities for the year
ended July 31, 2024 was primarily due to purchases of available-for-sale securities of approximately $155.7 million, purchases of $4.0
million in convertible notes receivable, due from Cyclo, and the investment in Cyclo common stock and warrants of $6.8 million, partially
offset by proceeds of $153.4 million from sales and maturities of available-for-sale securities and $2.5 million in proceeds from hedge
funds.

 Financing Activities

 Cash used in financing activities for the year
ended July 31, 2025 was primarily related to net proceeds from the issuance of common stock in the Rights Offering of $25 million offset
by a payment related to shares withheld for employee taxes of $0.2 million.

 Cash provided by financing activities for the
year ended July 31, 2024 was primarily related to the proceeds from sale of Rafael Medical Devices membership units of $0.9 million,
and partially offset by a principal payment of $0.8 million on the installment note acquired during the Day Three Acquisition.

 We do not anticipate paying dividends on our
common stock until we achieve sustainable profitability and retain certain minimum cash reserves. The payment of dividends in any specific
period will be at the sole discretion of our Board of Directors.

 Critical Accounting Estimates

 We have chosen accounting policies that we believe
are appropriate to accurately and fairly report our operating results and financial condition in conformity with U.S. GAAP. We apply
these accounting policies in a consistent manner. Our significant accounting policies are discussed in Note 2, "Summary of Significant
Accounting Policies", in our accompanying consolidated financial statements.

 The application of critical accounting policies
requires that we make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and related
disclosures. These estimates and assumptions are based on historical and other factors believed to be reasonable under the circumstances.
We evaluate these estimates and assumptions on an ongoing basis and may retain outside consultants to assist in our evaluation. If actual
results ultimately differ from previous estimates, the revisions are included in results of operations in the period in which the actual
amounts become known. The critical accounting policies that involve the most significant management judgments and estimates used in preparation
of our consolidated financial statements, or are the most sensitive to change from outside factors are:

 Business Combinations

 The purchase price for acquisitions are allocated
to the assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. The fair value of identifiable
intangible assets, in-process research and development ("IPR&D") and customer relationships, is based on detailed valuations
that use information and assumptions provided by management, including expected future cash flows. We allocate any excess purchase price
over the fair value of the identifiable net assets and liabilities acquired to goodwill. Acquired IPR&D pursuant to an asset acquisition
that has no alternative future use is expensed immediately as a component of in-process research and development expense in the consolidated

 Impairment of Long-Lived Assets

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

a layoff within our Infusion Technology segment, we concluded that a triggering event occurred during November 2024, that required us
to evaluate long-lived assets within the Infusion Technology segment for potential impairment under ASC 360. Accordingly, we completed
an analysis pursuant to ASC 360 and determined that the expected undiscounted cash flows of the asset group exceeded its carrying amount,
indicating that the long-lived assets were not impaired.

 We assess goodwill for impairment on an annual
basis as of May 31, or more frequently when events and circumstances occur indicating that the recorded goodwill may be impaired. Management
regularly monitors current business conditions and other factors including, but not limited to, adverse industry or economic trends and
lower projections of profitability that may impact future operating results. The process of evaluating the potential impairment of goodwill
requires significant judgment. In performing our annual goodwill impairment test, we are permitted to first assess qualitative factors
to determine whether it is more likely than not that the fair value of any of our reporting units is less than its carrying amount, including
goodwill. In performing the qualitative assessment, management considers certain events and circumstances specific to the reporting unit
and the entity as a whole, such as macroeconomic conditions, industry and market considerations, overall financial performance and cost
factors when evaluating whether it is more likely than not that the fair value of any of the reporting units is less than its carrying
amount. We are also permitted to bypass the qualitative assessment and proceed directly to the quantitative test. If we choose to undertake
the qualitative assessment and conclude that it is more likely than not that the fair value of a reporting unit is less than its carrying
amount, we would then proceed to the quantitative impairment test. In the quantitative assessment, we compare the fair value of the reporting
unit to its carrying amount, which includes goodwill. If the fair value exceeds the carrying value, no impairment loss exists. If the
fair value is less than the carrying amount, a goodwill impairment loss is measured and recorded.

a layoff within our Infusion Technology segment, we concluded that a triggering event occurred during November 2024, that required us
to assess if there was an impairment under ASC 350, Intangibles - Goodwill and Other ("ASC 350"). In accordance with ASC
350, we performed a quantitative goodwill impairment test, which indicated that the carrying amount of the reporting unit exceeded the
estimated fair value of the reporting unit, indicating that the goodwill of the reporting unit was impaired. We recorded an impairment
charge of $3.1 million during the year ended July 31, 2025, representing a full write-off of the goodwill balance associated with the
Infusion Technology operating segment.

 See Note 18 to our Consolidated Financial Statements
for further information.

 Clinical Trial Accruals

 We estimate clinical trial accruals related to
obligations for services performed on our behalf by third-party vendors. The amount recorded for the clinical trial accrual represents
our evaluation of the progress to completion of specific tasks, unbilled patient visits and the facts and circumstances known at the
time of the estimate as it relates to clinical trial activities.

 Off-Balance Sheet Arrangements

 We do not have any "off-balance sheet arrangements",
as defined in relevant SEC regulations, that are reasonably likely to have a current or future effect on our financial condition, results
of operations, liquidity, capital expenditures or capital resources.

 Item 7A. Quantitative
and Qualitative Disclosures about Market Risks

 FOREIGN CURRENCY RISK

 Revenue from tenants located in Israel represented
34% and 44% of our consolidated revenues for the years ended July 31, 2025 and 2024, respectively. The entirety of these revenues is
in currencies other than the U.S. Dollar. Our foreign currency exchange risk is somewhat mitigated by our ability to offset a portion
of these non-U.S. Dollar-denominated revenues with operating expenses that are paid in the same currencies. While the impact from fluctuations
in foreign exchange rates affects our revenues and expenses denominated in foreign currencies, the net amount of our exposure to foreign
currency exchange rate changes at the end of each reporting period is generally not material.

 Item 8. Financial Statements
and Supplementary Data.

 The Consolidated Financial Statements of the
Company and the report of the independent registered public accounting firm thereon starting on page F-1 are included herein.

 Item 9. Changes in and
Disagreements with Accountants on Accounting and Financial Disclosure.

 None.

 Item 9A. Controls and
Procedures

 Evaluation of Disclosure Controls and Procedures

 An evaluation was performed under the supervision
and with the participation of the Company's management, including the Chief Executive Officer and Chief Financial Officer, of the
effectiveness of the design and operation of the Company's disclosure controls and procedures (as defined in Rule 13a-15(e) promulgated
under the Securities and Exchange Act of 1934, as amended) as of July 31, 2025. On March 25, 2025, the Company acquired Cyclo Therapeutics,
Inc. (Cyclo) in a business combination as described in Note 3 – Cyclo Merger to our audited Consolidated Financial Statements.
Management has excluded the acquired business from its assessment of the effectiveness of the disclosure controls and procedures as of
July 31, 2025. Based on that evaluation, the Company's management, including the President and Chief Executive Officer and Chief
Financial Officer, concluded that the Company's disclosure controls and procedures were effective.

 Management's Annual Report on Internal
Control over Financial Reporting

 The Company's management is responsible
for establishing and maintaining adequate internal control over financial reporting. The internal control process has been designed under
management's supervision to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
the Company's financial statements for external reporting purposes in accordance with U.S. GAAP.

 Management conducted an assessment of the effectiveness
of the Company's internal control over financial reporting as of July 31, 2025 utilizing the framework established in Internal
Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The scope
of management's assessment of the effectiveness of the Company's internal control over financial reporting as of July 31,
2025 did not include the internal control over financial reporting of Cyclo, which the Company acquired on March 25, 2025. Cyclo is a
wholly owned subsidiary of the Company whose total assets, total liabilities, total revenues and total operating expenses represent approximately
48%, 39%, 53% and 40%, respectively, of the related consolidated financial statement amounts as of and for the year ended July 31, 2025.

 Based on this assessment, management has determined
that the Company's internal control over financial reporting as of July 31, 2025, is effective.

 The Company's internal control over financial
reporting includes policies and procedures that pertain to the maintenance of records that accurately and fairly reflect, in reasonable
detail, transactions and dispositions of assets; and provide reasonable assurances that: (1) transactions are recorded as necessary to
permit preparation of financial statements in accordance with U.S. GAAP; (2) receipts and expenditures are being made only in accordance
with authorizations of management and the directors of the Company; and (3) unauthorized acquisition, use, or disposition of the Company's
assets that could have a material effect on the Company's financial statements are prevented or timely detected.

 All internal control systems, no matter how well
designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with
respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are
subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies
or procedures may deteriorate.

 Changes in Internal Control over Financial
Reporting

 On March 25, 2025, the Company completed a business
combination with Cyclo as described in Note 3 – Cyclo Merger to our audited Consolidated Financial Statements. As a result
of the acquisition, the Company is reviewing the internal controls of Cyclo and is making appropriate changes as deemed necessary.

 Except for the changes in internal controls related
to Cyclo, there has been no significant change in the Company's internal control over financial reporting during the fourth quarter
of the year ended July 31, 2025 that have materially affected, or are reasonably likely to materially affect, the Company's internal
control over financial reporting.

 Material Weakness in the Acquired Business's
Internal Control Over Financial Reporting

 As discussed above, on March 25, 2025, the Company
acquired Cyclo in a business combination and has excluded the acquired entity from the July 31, 2025 evaluation of the effectiveness
of internal control over financial reporting and disclosure controls and procedures. However, management has identified a material weakness
in internal control over financial reporting related to the accruals and expenses recognized at Cyclo, a wholly-owned subsidiary, as
of July 31, 2025.

 A material weakness is a deficiency, or combination
of deficiencies, in internal controls over financial reporting such that there is a reasonable possibility that a material misstatement
of the Company's annual or interim financial statements will not be prevented or detected on a timely basis.

 The internal controls over financial reporting
at Cyclo were not appropriately designed or operating effectively to ensure accruals and associated expenses were recorded completely
and accurately, due to inadequately designed controls surrounding the month end accrual identification, measurement and recognition process,
including in the area of clinical trial accruals;

 The material weakness described above resulted
in the identification of immaterial misstatements, which were corrected within the consolidated financial statements for the year ended
July 31, 2025.

 Remediation Plan for Material Weakness in
Internal Control Over Financial Reporting

 In response to the material weakness identified
above, the Company developed a plan, which will be updated as deemed necessary, to remediate the material weakness at Cyclo, including
enhancing the design of and implementing additional process-level control activities and ensuring they are properly evidenced and operating
effectively. Such design and implementation control activities will include, but not be limited to:

 Integration of Cyclo's vendor
 and accounts payable management process into the Company's existing control process;

 Integration of Cyclo's accrual
 process into the Company's existing control process;

 Development of Cyclo's analytical
 review process;

 Development of Cyclo's clinical
 trial accrual estimation process.

 Because the reliability of the internal control
process requires repeatable execution, the successful on-going remediation of the material weakness will require on-going review and
evidence of effectiveness prior to concluding that the controls are effective. The Company's remediation efforts are underway; however,
there is no assurance that the remediation efforts will be effective in the future or that additional material weaknesses will not develop
or be identified.

 Item 9B. Other Information.

 None.

 Item 9C. Disclosure Regarding Foreign Jurisdictions
that Prevent Inspections.

 Not applicable.

 Item 10. Directors, Executive
Officers and Corporate Governance.

 The following is a list of our directors and
executive officers as of October 29, 2025, along with the specific information required by Rule 14a-3 of the Securities Exchange Act
of 1934:

 Executive Officers

 Howard S. Jonas — Chief Executive Officer

 David Polinsky — Chief Financial Officer

 Joshua Fine — Chief Operating Officer

 Directors

 Howard S. Jonas—Chairman of the Board

 Susan Y. Bernstein

 Alan Grayson

 Markus W. Sieger

 Dr. Mark Stein

 Dr. Michael J. Weiss

 Ex-Officio Director

 N. Scott Fine

 The remaining information required by this Item
will be contained in our Proxy Statement for our Annual Stockholders Meeting, which will be filed with the Securities and Exchange Commission
within 120 days after July 31, 2025, and which is incorporated by reference herein.

 Insider Trading Policies and Procedures

 We have insider trading policies and procedures
that govern the purchase, sale, and other dispositions of its securities by directors, officers, employees, and consultants, as well
as our own. We believe these policies and procedures are reasonably designed to promote compliance with insider trading laws, rules and
regulations and applicable listing standards. See "Index of Exhibits" within this Annual Report on Form 10-K for our Insider
Trading Policy.

 Corporate Governance

 We have included as exhibits to this Annual Report
on Form 10-K certificates of our Chief Executive Officer and Chief Financial Officer certifying the quality of our public disclosure.

 We make available free of charge through the
investor relations page of our web site ( our Annual Reports on Form 10-K, Quarterly Reports on Form
10-Q, Current Reports on Form 8-K and all amendments to those reports, and all beneficial ownership reports on Forms 3, 4 and 5 filed
by directors, officers and beneficial owners of more than 10% of our equity, as soon as reasonably practicable after such reports are
electronically filed with the Securities and Exchange Commission. We have adopted codes of business conduct and ethics for all of our
employees, including our principal executive officer, principal financial officer and principal accounting officer. Copies of the codes
of business conduct and ethics are available on our web site.

 Our web site and the information contained therein
or incorporated therein are not intended to be incorporated into this Annual Report on Form 10-K or our other filings with the Securities
and Exchange Commission.

 Item 11. Executive Compensation.

 The information required by this Item will be
contained in our Proxy Statement for our Annual Stockholders Meeting, which will be filed with the Securities and Exchange Commission
within 120 days after July 31, 2025, and which is incorporated by reference herein.

 Item 12. Security Ownership of Certain Beneficial
Owners and Management and Related Stockholder Matters.

 The information required by this Item will be
contained in our Proxy Statement for our Annual Stockholders Meeting, which will be filed with the Securities and Exchange Commission
within 120 days after July 31, 2025, and which is incorporated by reference herein.

 Item 13. Certain Relationships and Related
Transactions, and Director Independence.

 The information required by this Item will be
contained in our Proxy Statement for our Annual Stockholders Meeting, which will be filed with the Securities and Exchange Commission
within 120 days after July 31, 2025, and which is incorporated by reference herein.

 Item 14. Principal Accounting Fees and Services.

 The information required by this Item will be
contained in our Proxy Statement for our Annual Stockholders Meeting, which will be filed with the Securities and Exchange Commission
within 120 days after July 31, 2025, and which is incorporated by reference herein.

 Item 15. Exhibits, Financial Statement Schedules.

 (a)
 The following
 documents are filed as part of this Report:

 1 Report of Independent Registered Public Accounting
Firm on Consolidated Financial Statements.

 Consolidated Financial Statements covered by
Report of Independent Registered Public Accounting Firm.

 2 Financial Statement Schedules.

 All schedules have been omitted since they are
either included in the Notes to Consolidated Financial Statements or not required or not applicable.

 3 Exhibits. The exhibits listed in paragraph
(b) of this item are filed, furnished, or incorporated by reference as part of this Form 10-K.

 Certain of the agreements filed as exhibits to
this Form 10-K contain representations and warranties by the parties to the agreements that have been made solely for the benefit of
the parties to the agreement. These representations and warranties:

 may have been
 qualified by disclosures that were made to the other parties in connection with the negotiation
 of the agreements, which disclosures are not necessarily reflected in the agreements;

 may apply standards
 of materiality that differ from those of a reasonable investor; and

 were made only
 as of specified dates contained in the agreements and are subject to subsequent developments
 and changed circumstances.

 Accordingly, these representations and warranties
may not describe the actual state of affairs as of the date that these representations and warranties were made or at any other time.
Investors should not rely on them as statements of fact.

 ( b)
 Exhibits.

 Exhibit

 Number

 Description

 2.1(1)

 Agreement
 and Plan of Merger, dated as of August 21, 2024, by and among Rafael, Cyclo, First Merger Sub and Second Merger Sub

 3.1(2)

 Amended
 and Restated Certificate of Incorporation of Rafael Holdings, Inc.

 3.2(3)

 Fourth
 Amended and Restated By-Laws of Rafael Holdings, Inc.

 4.2*

 Description of the Registrant's Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934

 10.1(4)

 2021 Equity Incentive Plan, as amended and restated

 10.2(5)

 Employment Agreement dated as of June 13, 2022, between the Company and Howard S. Jonas.

 10.3(6)

 Amended
 and Restated Executive Employment Agreement between Joshua Fine and Cyclo Therapeutics, Inc., dated as of January 30, 2025.

 10.4(7)

 Novation
 and Amendment to the Amended and Restated Executive Employment Agreement between Joshua Fine and Cyclo Therapeutics, Inc., dated
 August 6, 2025.

 10.5(7)

 General
 Release Agreement, dated August 4, 2025, between the Company and N. Scott Fine.

 10.6(8)

 Securities
 Purchase Agreement, dated August 19, 2021, by and among Rafael Holdings, Inc. and the Investors named therein.

 10.7(8)

 Securities
 Purchase Agreement, dated August 19, 2021, by and among Rafael Holdings, Inc. and I9 Plus, LLC.

 10.8(8)

 Registration
 Rights Agreement, dated August 19, 2021, by and among Rafael Holdings, Inc. and the Investors named therein.

 19.01*

 Insider Trading Policy

 21.01*

 Subsidiaries of the Registrant

 23.1*

 Consent of CohnReznick LLP, Independent Registered Public Accounting
 Firm

 31.01*

 Certification of Chief Executive
 Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 31.02*

 Certification of Chief Financial
 Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 32.01*

 Certification of Chief Executive
 Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 32.02*

 Certification of Chief Financial
 Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 97*

 Compensation Clawback Policy

 101.INS*

 101.SCH*

 101.CAL*

 101.DEF*

 101.LAB*

 101.PRE*

 104*

 in Exhibit 101).

 *
 Filed or furnished herewith.

 (1)
 Incorporated by reference
 to Form 8-K, filed August 22, 2024.

 (2)
 Incorporated by reference
 to Form 10-12G/A, filed March 26, 2018.

 (3)
 Incorporated by reference
 to Form 8-K, filed July 18, 2025.

 (4)
 Incorporated
by reference to Exhibit A of the Company's Definitive Proxy Statement, filed with the Commission on November 19, 2024.

 (5)
 Incorporated
by reference to Form 8-K, filed June 14, 2022.

 (6)
 Incorporated by reference to Exhibit to Amendment
No. 4 to the Registration Statement on S-4 filed February 11, 2025.

 (7)
 Incorporated by reference to Form 8-K, filed August 7, 2025.

 (8)
 Incorporated by reference to Form 8-K, filed August 24, 2021.

 Item 16. Form 10-K Summary

 None.

 Signatures

 Pursuant to the requirements of Section 13 or
15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf
by the undersigned, thereunto duly authorized.

 Rafael Holdings, Inc.

 By:

 /s/ Howard
 Jonas

 Howard Jonas

 Chief Executive Officer

 Date: October 29, 2025

 Pursuant to the requirements of the Securities
Exchange Act of 1934, this Annual Report on Form 10-K has been signed by the following persons on behalf of the Registrant and in the
capacities and on the dates indicated.

 Signature

 Titles

 Date

 /s/ Howard Jonas

 Chief Executive Officer

 Howard Jonas

 (Principal Executive Officer and Chairman of the Board)

 /s/ David Polinsky

 Chief Financial Officer

 David Polinsky

 (Principal Financial Officer and Principal Accounting Officer)

 /s/ Susan Y. Bernstein

 Susan Y. Bernstein

 /s/ Alan Grayson

 Alan Grayson

 /s/ Markus W. Sieger

 Markus W. Sieger

 /s/ Dr. Mark Stein

 Dr. Mark Stein

 /s/ Michael J. Weiss

 Dr. Michael J. Weiss

 Index to Consolidated Financial Statements

 Report of Independent Registered Public Accounting Firm (PCAOB ID 596)

 Consolidated Balance Sheets as of July 31, 2025 and 2024

 Consolidated Statements of Operations and Comprehensive Loss for the years ended July 31, 2025 and 2024

 Consolidated Statements of Equity for the years ended July 31, 2025 and 2024

 Consolidated Statements of Cash Flows for the years ended July 31, 2025 and 2024

 Notes to Consolidated Financial Statements

 F- 1

 REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM

 The Board of Directors and Stockholders

 Rafael Holdings, Inc.

 Opinion on the Consolidated Financial Statements

 We have audited the accompanying consolidated
balance sheets of Rafael Holdings, Inc. as of as of July 31, 2025 and 2024, and the related consolidated statements of operations and
comprehensive loss, equity and cash flows for the years then ended, and the related notes (collectively referred to as the "consolidated
financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial
position of Rafael Holdings, Inc. as of July 31, 2025 and 2024, and the results of its operations and its cash flows for the years then
ended, in conformity with accounting principles generally accepted in the United States of America.

 Basis for Opinion

 These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements
based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB")
and are required to be independent with respect to Rafael Holdings, Inc. in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.

 We conducted our audits in accordance with the
standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated
financial statements are free of material misstatement, whether due to error or fraud. Rafael Holdings, Inc. is not required to have,
nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain
an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of
the Company's internal control over financial reporting. Accordingly, we express no such opinion.

 Our audits included performing procedures to assess
the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures
that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the
consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide
a reasonable basis for our opinion.

 Critical Audit Matter

 The critical audit matter communicated below is
a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated
to the audit committee and that: (i) related to accounts or disclosures that are material to the consolidated financial statements and
(ii) involved our especially challenging, subjective, or complex judgments. The communications of critical audit matters does not alter
in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit
matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

 Valuation of In-Process Research and Development
in the Cyclo Therapeutics, Inc. Merger

 F- 2

 Description of the matter

 As described in Note 3 to the consolidated financial
statements, the Company completed a business combination transaction pursuant to which, the Company became the primary beneficiary of
Cyclo Therapeutics, Inc., a variable interest entity ("VIE") that constitutes a business. As a result, the consolidation was
treated as and accounted for as a business combination. The Company recorded an acquired in-process research and development asset at
fair value which was calculated by management using a discounted cash flow model. The methods used to estimate the fair value of the acquired
in-process research and development asset utilizing a discounted cash flow involve significant assumptions. The significant assumptions
applied by management in estimating the fair value of acquired in-process research and development asset included income projections and
discount rates.

 Significant judgment is exercised by the Company
in determining the valuation of the in-process research and development asset.

 Given these factors, the related audit effort
in evaluating management's judgments in determining the valuation of the in-process research and development asset was challenging,
subjective, and complex and required a high degree of auditor judgment.

 How our Audit Addressed the Critical Audit Matter

 Our principal audit procedures related to this
critical audit matter included the following:

 We gained an understanding of and evaluated the
design and implementation of the Company's controls that address the risk of material misstatement related to developing fair value
estimates and management projections.

 We evaluated management's significant accounting
policies related to estimating the fair value of intangible assets.

 We tested the reasonableness of the underlying
data used to determine the forecasted discounted future cash flows.

 We evaluated the reasonableness of the discounted
future cash flows utilized in the discounted cash flow model by comparing forecasted discounted cash flows to market information.

 We evaluated the reasonableness of the probability
weighting of the discounted cash flows based upon the likelihood of approval of the acquired research and development project by comparing
the probability to historical market information and industry data.

 Professionals with specialized skill and knowledge
were used to assist in evaluating the reasonableness of the discount rates utilized.

 /s/ CohnReznick LLP

 We have served as Company's auditor since
2019.

 New York, New York

 F- 3

 PART I. FINANCIAL INFORMATION

 CONSOLIDATED BALANCE SHEETS

 (in thousands, except share and per share data)

 2025

 2024

 ASSETS

 CURRENT ASSETS

 Cash and cash equivalents

 $
 52,769

 $
 2,675

 Available-for-sale securities

 —

 63,265

 Interest receivable

 —

 Prepaid clinical costs

 1,045

 —

 Convertible notes receivable, due from Cyclo

 —

 5,191

 Other receivables

 1,206

 —

 Accounts receivable, net of allowance for credit losses of $ 245 at July 31, 2025 and July 31, 2024

 Inventory

 —

 Total current assets

 56,714

 72,502

 Property and equipment, net

 1,596

 2,120

 Non-current prepaid clinical costs

 1,399

 —

 Investments – Cyclo

 —

 12,010

 Investments – Hedge Funds

 —

 2,547

 Convertible notes receivable classified as available-for-sale

 1,858

 1,146

 3,050

 Intangible assets, net

 1,847

 In-process research and development

 31,575

 1,575

 Other assets

 TOTAL ASSETS

 $
 114,109

 $
 96,832

 LIABILITIES AND EQUITY

 CURRENT LIABILITIES

 Accounts payable

 $
 6,893

 $
 2,556

 Accrued expenses

 3,304

 1,798

 Convertible notes payable

 Other current liabilities

 Due to related parties

 Installment note payable

 —

 1,700

 Total current liabilities

 11,600

 7,514

 Accrued expenses, noncurrent

 3,895

 2,982

 Convertible notes payable, noncurrent

 Other liabilities

 Deferred income tax liability

 —

 TOTAL LIABILITIES

 15,738

 10,574

 COMMITMENTS AND CONTINGENCIES

 EQUITY

 Class A common stock, $ 0.01 par value; 35,000,000 shares authorized, 787,163 shares issued and outstanding as of July 31, 2025 and July 31, 2024

 Class B common stock, $ 0.01 par value; 200,000,000 shares authorized, 50,789,697 issued and outstanding (excluding treasury shares of 101,487) as of July 31, 2025, and 24,142,535 issued and 23,819,948 outstanding (excluding treasury shares of 101,487) as of July 31, 2024

 Additional paid-in capital

 322,161

 280,048

 Accumulated deficit

 ( 232,263
)

 ( 201,743
)

 Treasury stock, at cost; 101,487 Class B shares as of July 31, 2025 and July 31, 2024

 ( 168
)

 ( 168
)

 Accumulated other comprehensive income related to unrealized income on available-for-sale securities

 Accumulated other comprehensive income related to foreign currency translation
 adjustment

 3,787

 3,691

 Total equity attributable to Rafael Holdings, Inc.

 94,391

 82,185

 Noncontrolling interests

 3,980

 4,073

 TOTAL EQUITY

 98,371

 86,258

 TOTAL LIABILITIES AND EQUITY

 $
 114,109

 $
 96,832

 See accompanying notes to the consolidated financial
statements.

 F- 4

 CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
LOSS

 (in thousands, except share and per share data)

 2025

 2024

 REVENUE

 $

 $

 Rental – Third Party

 Rental – Related Party

 Product revenue

 —

 Total revenue

 COSTS AND EXPENSES

 Cost of Infusion Technology revenue

 Cost of product revenue

 —

 13,781

 8,854

 12,823

 4,170

 In-process research and development expense

 —

 89,861

 Loss on impairment of goodwill

 3,050

 —

 ( 29,159
)

 ( 102,627
)

 Interest income

 1,996

 2,383

 Loss on initial investment in Day Three upon acquisition

 —

 ( 1,633
)

 Realized gain on available-for-sale securities

 1,772

 Realized loss on investment in equity securities

 —

 ( 46
)

 Realized gain on investment - Cyclo

 —

 Unrealized (loss) gain on investment - Cyclo

 ( 5,144
)

 Unrealized (loss) gain on convertible notes receivable, due from Cyclo

 ( 719
)

 1,191

 Unrealized gain on investment - Hedge Funds

 —

 Recovery of receivables from Cornerstone

 —

 31,305

 Interest expense

 ( 658
)

 ( 248
)

 Other income, net

 Loss before income taxes

 ( 33,196
)

 ( 67,261
)

 Benefit from income taxes

 2,553

 2,680

 Equity in loss of Day Three

 —

 ( 422
)

 Consolidated net loss

)

)

 Net loss attributable to noncontrolling interests

 ( 123
)

 ( 30,593
)

 Net loss attributable to Rafael Holdings, Inc.

 $
 ( 30,520
)

 $
 ( 34,410
)

 OTHER COMPREHENSIVE LOSS

 Consolidated net loss

 $
)

 $
)

 Unrealized gain on available-for-sale securities

 Foreign currency translation adjustment

 ( 53
)

 Comprehensive loss

 ( 30,300
)

 ( 64,592
)

 Comprehensive loss attributable to noncontrolling interests

 ( 128
)

 ( 30,595
)

 Comprehensive loss attributable to Rafael Holdings, Inc.

 $
 ( 30,172
)

 $
 ( 33,997
)

 Loss per share attributable to common stockholders

 Basic and diluted:

 $
 ( 1.04
)

 $
 ( 1.45
)

 Weighted average number of shares used in calculation of loss per share

 Basic and diluted

 29,422,221

 23,745,516

 See accompanying notes to the consolidated financial
statements.

 F- 5

 CONSOLIDATED STATEMENTS OF EQUITY

 (in thousands, except share data)

 Year
 Ended July 31, 2025

 Additional

 Accumulated
 other

 Treasury
 Stock

 Common
 Stock, Series A

 Common
 Stock, Series B

 paid-in

 Accumulated

 comprehensive

 Class
 B

 Total

 capital

 deficit

 income

 interests

 Equity

 Balance
 at July 31, 2024

 787,163

 $

 23,819,948

 $

 $
 280,048

 $
 ( 201,743
)

 $
 3,802

 $
 4,073

 101,487

 $
 ( 168
)

 $
 86,258

 Consolidated net
 loss

 —

 —

 —

 —

 —

 ( 30,520
)

 —

 ( 123
)

 —

 —

)

 Stock-based
 compensation

 —

 —

 473,514

 2,124

 —

 —

 —

 —

 —

 2,128

 Forfeiture
 of restricted stock

 —

 —

 ( 31,875
)

 —

 ( 5
)

 —

 —

 —

 —

 —

 ( 5
)

 withheld for payroll taxes

 —

 —

 ( 135,386
)

 —

 ( 215
)

 —

 —

 —

 —

 —

 ( 215
)

 Sale
 of Rafael Medical Devices membership units

 —

 —

 —

 —

 —

 —

 —

 —

 —

 issued in connection with Cyclo Merger

 —

 —

 7,132,228

 14,621

 —

 —

 —

 —

 —

 14,692

 Rollover
 options issued in connection with Cyclo Merger

 —

 —

 —

 —

 —

 —

 —

 —

 —

 Replacement
 Warrants issued in connection with Cyclo Merger

 —

 —

 —

 —

 —

 —

 —

 —

 —

 Issuance
 of common stock in Rights Offering, net of transaction costs

 —

 —

 19,531,268

 24,712

 —

 —

 —

 —

 —

 24,907

 DTLM
 shares issued in connection with the DTLM Sale Transactions

 —

 —

 —

 —

 —

 —

 —

 —

 —

 Unrealized
 gain on available-for-sale securities

 —

 —

 —

 —

 —

 —

 —

 —

 —

 currency translation adjustment

 —

 —

 —

 —

 —

 —

 —

 —

 —

 Balance
 at July 31, 2025

 787,163

 $

 50,789,697

 $

 $
 322,161

 $
 ( 232,263
)

 $
 4,145

 $
 3,980

 101,487

 $
 ( 168
)

 $
 98,371

 See accompanying notes to the consolidated financial
statements.

 F- 6

 CONSOLIDATED STATEMENTS OF EQUITY

 (in thousands, except share data)

 Year
 Ended July 31, 2024

 Additional

 Accumulated
 other

 Treasury
 Stock

 Common
 Stock, Series A

 Common
 Stock, Series B

 paid-in

 Accumulated

 comprehensive

 Class
 B

 Total

 capital

 deficit

 income

 interests

 Equity

 Balance
 at July 31, 2023

 787,163

 $

 23,490,527

 $

 $
 264,010

 $
 ( 167,333
)

 $
 3,372

 $
 ( 3,664
)

 —

 $
 —

 $
 96,629

 Consolidated
 net loss

 —

 —

 —

 —

 —

 ( 34,410
)

 —

 ( 30,593
)

 —

 —

)

 Stock-based
 compensation

 —

 —

 506,826

 2,293

 —

 —

 —

 —

 —

 2,296

 withheld for payroll taxes

 —

 —

 ( 75,918
)

 ( 1
)

 ( 135
)

 —

 —

 —

 —

 —

 ( 136
)

 Unrealized
 gain on available-for-sale securities

 —

 —

 —

 —

 —

 —

 —

 —

 —

 Sale
 of Rafael Medical Devices membership units

 —

 —

 —

 —

 —

 —

 —

 —

 interest in Day Three acquisition

 —

 —

 —

 —

 —

 —

 —

 1,151

 —

 —

 1,151

 Gain
 on RP Finance consolidation

 —

 —

 —

 —

 7,600

 —

 —

 —

 —

 —

 7,600

 Paid-in
 capital arising from Cornerstone Acquisition

 —

 —

 —

 —

 7,260

 —

 —

 —

 —

 —

 7,260

 interest arising from Cornerstone Acquisition

 —

 —

 —

 —

 —

 —

 —

 27,501

 —

 —

 27,501

 interest arising from RP Finance Consolidation

 —

 —

 —

 —

 —

 —

 —

 12,667

 —

 —

 12,667

 Elimination
 of RP Finance investment in Cornerstone

 —

 —

 —

 —

 ( 1,849
)

 —

 —

 ( 3,082
)

 —

 —

 ( 4,931
)

 Purchases
 of treasury stock

 —

 —

 ( 101,487
)

 —

 —

 —

 —

 —

 101,487

 ( 168
)

 ( 168
)

 Dissolution
 of Levco

 —

 —

 —

 —

 —

 —

 —

 —

 currency translation adjustment

 —

 —

 —

 —

 —

 —

 ( 53
)

 —

 —

 —

 ( 53
)

 Balance
 at July 31, 2024

 787,163

 $

 23,819,948

 $

 $
 280,048

 $
 ( 201,743
)

 $
 3,802

 $
 4,073

 101,487

 $
 ( 168
)

 $
 86,258

 See accompanying notes to the consolidated financial
statements.

 F- 7

 CONSOLIDATED STATEMENTS OF CASH FLOWS

 2025

 2024

 Operating activities

 Consolidated net loss

 $
)

 $
)

 Adjustments to reconcile consolidated net loss to net cash used in operating activities

 Loss (gain) on sale of property and equipment

 ( 27
)

 Net unrealized gain on investments - Hedge Funds

 —

 ( 63
)

 Realized loss on investment in equity securities

 —

 Realized gain on available-for-sale securities

 ( 178
)

 ( 1,772
)

 Amortization of discount on available-for-sale securities

 ( 285
)

 ( 1,891
)

 Loss on initial investment in Day Three upon acquisition

 —

 1,633

 Loss on impairment of goodwill

 3,050

 —

 Realized gain on equity investments - Cyclo

 —

 ( 424
)

 Unrealized loss (gain) on equity investments - Cyclo

 5,144

 ( 37
)

 Recovery of receivables from Cornerstone

 —

 ( 31,305
)

 In-process research and development expense

 —

 89,861

 Unrealized loss (gain) on convertible notes receivable, due from Cyclo

 ( 1,191
)

 Gain on dissolution of a business

 —

 Equity in loss of Day Three

 —

 Change in deferred income taxes

 ( 165
)

 —

 Credit loss expense

 —

 Stock-based compensation

 2,123

 2,296

 Gain on DTLM Sale Transactions

 ( 30
)

 —

 Change in assets and liabilities, net of effects from acquisitions:

 Trade accounts receivable

 ( 151
)

 ( 150
)

 Interest receivable

 ( 139
)

 Inventory

 ( 11
)

 —

 Prepaid clinical costs (current and non-current)

 —

 Other receivables

 ( 273
)

 —

 Other assets

 Accounts payable and accrued expenses

 ( 922
)

 ( 146
)

 Other current liabilities

 ( 67
)

 ( 938
)

 Due to related parties

 ( 10
)

 Accrued expenses, noncurrent

 —

 Convertible notes payable

 —

 Other liabilities

 ( 70
)

 Net cash used in operating activities

 ( 18,924
)

 ( 7,802
)

 Investing activities

 Purchase of property and equipment

 ( 4
)

 ( 143
)

 Proceeds from sale of property and equipment

 —

 Purchases of available-for-sale securities

 ( 16,988
)

 ( 155,657
)

 Proceeds from the sale and maturities of available-for-sale securities

 80,694

 153,352

 Proceeds from Day Three patent sale

 —

 Purchase of intangible assets

 ( 17
)

 ( 35
)

 Proceeds from sales of equity securities

 —

 Issuance of Convertible notes receivable, due from Cyclo

 —

 ( 4,000
)

 Payments for Convertible notes receivable, due from Cyclo

 ( 19,500
)

 —

 Purchase of investments in Cyclo

 —

 ( 6,786
)

 Issuance of convertible note receivable

 —

 ( 1,000
)

 Issuance of Day Three Promissory Notes

 —

 ( 1,989
)

 Proceeds from investments - Other Pharmaceuticals

 —

 Cash paid in Cyclo Merger, net of cash acquired

 ( 2,709
)

 —

 Cash acquired in acquisition of Day Three, net of cash payments

 —

 1,099

 Cash acquired in the Cornerstone Acquisition, net of cash payments

 —

 1,256

 Proceeds from hedge funds

 2,547

 2,500

 Net cash provided by (used in) investing activities

 44,035

 ( 10,820
)

 Financing activities

 Principal payments on installment note payable

 —

 ( 800
)

 Payments for taxes related to shares withheld for employee taxes

 ( 215
)

 ( 136
)

 Purchases of treasury stock

 —

 ( 168
)

 Proceeds from issuance of common stock in Rights Offering, net of transaction costs

 25,001

 —

 Proceeds from sale of Rafael Medical Devices membership units

 Net cash provided by (used in) financing activities

 24,830

 ( 179
)

 Effect of exchange rate changes on cash and cash equivalents

 ( 22
)

 Net increase (decrease) in cash and cash equivalents

 50,094

 ( 18,823
)

 Cash and cash equivalents, beginning of year

 2,675

 21,498

 Cash and cash equivalents, end of year

 $
 52,769

 $
 2,675

 Non-cash supplemental disclosure

 Fair value of Class B common stock issued as consideration in Cyclo Merger

 $
 14,692

 $
 —

 Fair value of Rollover Options issued as consideration in Cyclo Merger

 $

 $
 —

 Fair value of Replacement Warrants issued as consideration in Cyclo Merger

 $

 $
 —

 Fair value of Cyclo Convertible notes receivable included as consideration in Cyclo Merger

 $
 21,472

 $
 —

 Transaction costs related to the Rights Offering included in accounts payable

 $

 $
 —

 Conversion of RFL Line of Credit into Cornerstone Common Stock

 $
 —

 $
 37,845

 Conversion of 2023 Promissory Note into Cornerstone Common Stock

 $
 —

 $
 2,663

 Recognition of noncontrolling interest in the Cornerstone Acquisition

 $
 —

 $
 27,501

 Recognition of noncontrolling interest in the RP Finance Consolidation, net of elimination

 $
 —

 $
 9,585

 Gain on RP Finance Consolidation recorded as an adjustment to additional paid-in capital due to related party
 nature of transaction, net of elimination

 $
 —

 $
 5,751

 Non-cash consideration received in exchange for equipment

 $
 —

 $

 Conversion of Convertible notes receivable, due from Cyclo into common stock

 $
 2,500

 $
 —

 Elimination of principal and accrued interest on the Day Three Promissory Notes included in consideration
 for acquisition of Day Three

 $
 —

 $
 2,000

 Convertible note receivable received in exchange for Day Three Labs Manufacturing assets

 $

 $
 —

 See
accompanying notes to the consolidated financial statements.

 F- 8

 NOTE 1 – DESCRIPTION OF BUSINESS

 Rafael Holdings, Inc. ("Rafael Holdings", "Rafael",
"we" or the "Company") is a biotechnology company that develops pharmaceuticals and holds interests in clinical
and early-stage companies that develop pharmaceuticals and medical devices. The Company's lead candidate is Trappsol Cyclo,
which is being evaluated in clinical trials for the potential treatment of Niemann-Pick Disease Type C1 ("NPC1"), a rare,
fatal and progressive genetic disorder. The Company also holds: (i) a majority equity interest in LipoMedix Pharmaceuticals Ltd. ("LipoMedix"),
a clinical stage pharmaceutical company; (ii) Barer Institute Inc. ("Barer"), a wholly-owned cancer research focused entity
whose operations have been substantially curtailed; (iii) a majority interest in Cornerstone Pharmaceuticals, Inc. ("Cornerstone"),
formerly known as Rafael Pharmaceuticals Inc., a cancer metabolism-based therapeutics company; (iv) a majority interest in Rafael Medical
Devices, LLC ("Rafael Medical Devices"), an orthopedic-focused medical device company developing instruments to advance minimally
invasive surgeries; and (v) a majority interest in Day Three Labs, Inc. ("Day Three"), a company which empowers third-party
manufacturers to reimagine their existing product offerings by utilizing Day Three's technology and innovation like Unlokt.
The Company's primary focus has been the continued development of Trappsol Cyclo through the completion of its
ongoing pivotal Phase 3 clinical trial, the potential filing for regulatory approval and ultimately, if approved, commercialization of
the product. We also look to expand its investment portfolio through opportunistic and strategic investments including that address high
unmet medical needs.. The Company continuously evaluates their other holdings to ensure the focus of their resources are on core assets
and specifically the continued development of Trappsol Cyclo.

 Historically, the Company owned real estate assets.
As of July 31, 2025, the Company holds a portion of a commercial building in Jerusalem, Israel as its sole remaining real estate asset.

 In May 2023, the Company first invested in Cyclo,
a clinical-stage biotechnology company that develops cyclodextrin-based products for the potential treatment of neurodegenerative diseases.
Cyclo's lead drug candidate is Trappsol Cyclo (hydroxypropyl beta cyclodextrin), a treatment for NPC1. NPC1
is a rare and fatal autosomal recessive genetic disease resulting in disrupted cholesterol metabolism that impacts the brain, lungs,
liver, spleen, and other organs. In January 2017, the FDA granted Fast Track designation to Trappsol Cyclo for
the treatment of NPC1. Initial patient enrollment in the U.S. Phase I study commenced in September 2017 and in May 2020, Cyclo announced
Top Line data indicating Trappsol Cyclo was well tolerated in this study. Cyclo is currently conducting a Phase
3 Clinical Trial evaluating Trappsol Cyclo in Pediatric and Adult Patients with Niemann-Pick Disease, Type C1. On
March 25, 2025, the Company consummated the Merger with Cyclo whereby Cyclo became a wholly-owned subsidiary of the Company. See Note
3 for more information on the Merger with Cyclo.

 LipoMedix is a clinical stage company based in Israel that is focused
on the development of a product candidate that holds the potential to be an innovative, safe, and effective cancer therapy based on liposome
delivery. As of July 31, 2025, the Company's ownership interest in LipoMedix was approximately 95 %. As needed, the Company provides debt
or equity funding to Lipomedix to support its development and clinical efforts. LipoMedix is currently exploring strategic options for
its lead candidate, including potential licensing opportunities, collaborations with industry partners, and investigator-initiated studies.

 In 2019, the Company established Barer, originally as a preclinical
cancer metabolism research operation, to focus on developing a pipeline of novel therapeutic compounds, including compounds designed to
regulate cancer metabolism with potentially broader application in other indications beyond cancer. Barer was comprised of scientists
and academic advisors that are experts in cancer metabolism, chemistry, and drug development. In addition to its own internal discovery
efforts, Barer pursued collaborative research agreements and in-licensing opportunities with leading scientists from top academic institutions.
Barer's majority owned subsidiary, Farber Partners, LLC ("Farber"), was formed around one such agreement with Princeton
University's Office of Technology Licensing ("Princeton") for technology from the laboratory of Dr. Joshua Rabinowitz,
in the Department of Chemistry, Princeton University, for an exclusive worldwide license to its SHMT (serine hydroxymethyltransferase)
inhibitor program. In November 2022, the Company resolved to curtail its early-stage development efforts, including pre-clinical research
at Barer. Since then, the Company has sought partners for Farber programs and has entered into a license agreement for one of its technologies
that is in the pre-clinical research stage with the Ludwig Institute of Cancer Research and has transferred majority ownership of another
one of its technologies, SHMT, to a new company, Forme Therapeutics, that is being managed by Dr. Joshua Rabinowitz with the goal of developing
SHMT. Going forward, the Company expects that Barer will primarily operate as an entity holding interest in these two cancer-focused opportunities.

 F- 9

 NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

 The Company owns a 37.5 % equity interest in RP
Finance LLC ("RP Finance"), which was, until March 13, 2024 (the date of the RP Finance Consolidation (as described in Note
6)), accounted for under the equity method. RP Finance is an entity in which vehicles associated with members of the family of Howard
S. Jonas (Executive Chairman, Chief Executive Officer, President, Chairman of the Board, and controlling stockholder of the Company),
hold an aggregate 37.5 % equity interest. RP Finance holds debt and equity investments in Cornerstone. In October 2021, Cornerstone received
negative results of its Avenger 500 Phase 3 study for Devimistat in pancreatic cancer as well as a recommendation to stop its ARMADA
2000 Phase 3 study due to a determination that the trial would be unlikely to achieve its primary endpoint (the "Data Events").
Due to the Data Events, RP Finance fully impaired its then debt and equity investments in Cornerstone.

 On March 13, 2024, Cornerstone consummated a restructuring of its outstanding
debt and equity interests (the "Cornerstone Restructuring"). As a result of the Cornerstone Restructuring, Rafael became a
 67 % owner of the issued and outstanding common stock of Cornerstone (the "Cornerstone Acquisition"), and Cornerstone became
a consolidated subsidiary of Rafael. See Note 6 for additional information on the Cornerstone Restructuring, Cornerstone Acquisition,
and RP Finance Consolidation. The Company is currently reviewing Cornerstone's current efforts, prospects and available resources
to determine its optimal operational direction.

 In May 2021, the Company formed Rafael Medical
Devices, an orthopedic-focused medical device company developing instruments to advance minimally invasive surgeries. In August 2023,
Rafael Medical Devices sold an aggregate 31.6 % equity interest to third parties for $ 925,000. In February 2025, the Company invested
approximately $ 582,000 in cash, and Rafael Medical Devices raised approximately $ 44,000 from third parties in exchange for Rafael Medical
Devices' Class A Units. The Company currently holds a 73 % equity interest in Rafael Medical Devices. On December 11, 2024, Rafael Medical
Devices received a substantial equivalence determination for the VECTR System from the Food and Drug Administration ("FDA")
in response to Rafael Medical Devices' 510(k) premarket notification. The FDA's clearance of the VECTR System is for use
in minimally invasive ligament or fascia release surgeries, such as carpal tunnel release in the wrist and cubital tunnel release in
the elbow. The VECTR System has been classified into Class II and is subject to special controls (performance standards). Rafael Medical
Devices' development of future products will depend upon the success of the VECTR System and the Company's ability to identify
attractive opportunities in the marketplace.

 In April 2023, the Company first invested in Day Three, a company which
empowers third-party manufacturers to reimagine their existing product offerings enabling those third-party manufacturers to bring to
market better, cleaner, more precise and predictable versions of their products by utilizing Day Three's technology and innovation
like Unlokt. In January 2024, the Company entered into a series of transactions with Day Three and certain of its shareholders,
acquiring a controlling interest in Day Three and subsequently consolidating Day Three's results (the "Day Three Acquisition").
On March 14, 2025, Day Three Labs Manufacturing, a majority owned subsidiary of Day Three, entered into an Asset Purchase Agreement and
Licensing Agreement (the "DTLM Sale Agreement"), pursuant to which they sold assets and licensed certain applications of their
Unlokt technology used in their cannabinoid ingredient manufacturing business. See Note 13 for additional information.

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

 F- 10

 NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

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

 Company

 Country of Incorporation

 Percentage
 Owned

 Broad Atlantic Associates, LLC

 100 %

 IDT R.E. Holdings Ltd.

 Israel

 100 %

 Rafael Holdings Realty, Inc.

 100 %

 Barer Institute, Inc.

 100 %*

 Hillview Avenue Realty, JV

 100 %

 Hillview Avenue Realty, LLC

 100 %

 Rafael Medical Devices, LLC

 73 %

 Farber Partners, LLC

 93 %

 Pharma Holdings, LLC

 90 %**

 LipoMedix Pharmaceuticals Ltd. (Note 12)

 Israel

 95 %

 Altira Capital & Consulting, LLC

 67 %

 CS Pharma Holdings, LLC (Note 7)

 45 %**

 Day Three Labs, Inc. (Note 13)

 84 %

 Cornerstone Pharmaceuticals, Inc. (Note 6)

 67 %

 RP Finance, LLC (Note 8)

 38 %

 Cyclo Therapeutics, LLC (Note 3)

 United States – Nevada

 100 %

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

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

 NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES

 Basis of Presentation

 The Company's fiscal year ends on July
31 of each calendar year. Each reference below to a fiscal year refers to the fiscal year ending in the calendar year indicated (e.g.,
fiscal year 2025 refers to the fiscal year ended July 31, 2025).

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

 Use of Estimates

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

 Out of Period Correction

 The Company identified prior period errors
related to the balance of accrued expenses on Cyclo's opening balance sheet and the consolidated balance of consolidated accrued
expenses as of April 30, 2025, as reported in the Company's unaudited consolidated financial statements as of and for the three and
nine months ended April 30, 2025. The Company corrected the errors in the fourth quarter of fiscal 2025 consolidated financial
statements through an out of period adjustment.

 The Company assessed the materiality of these
errors on prior period and the fourth quarter of fiscal 2025 consolidated financial statements in accordance with SEC Staff Accounting
Bulletin No. 99, "Materiality," (ASC Topic 250, Accounting for Changes and Error Corrections). Based on this assessment,
the Company concluded that these errors and the corrections of these errors in the fourth quarter of fiscal 2025 are not material to
any previously presented consolidated financial statements and to the fourth quarter of fiscal 2025 consolidated financial statements.
Accordingly, the Company corrected these immaterial errors in the fourth quarter of fiscal 2025 consolidated financial statements which
are included in the consolidated financial statements for the year ended July 31, 2025 included in this Annual Report on Form 10-K.

 F- 11

 The corrections of the errors in the fourth quarter
of fiscal 2025 resulted in a net decrease of General and administrative expense of $ 58 thousand, a net decrease of Research and development
expenses of $ 232 thousand, and a total net decrease to Loss before income taxes and Net loss attributable to Rafael Holdings, Inc. of
$ 290 thousand. The corrections also resulted in an increase to Goodwill and Accrued expenses on the Cyclo opening balance sheet of $ 1.293 million.

 Liquidity

 As of July 31, 2025, the Company had cash
and cash equivalents of approximately $ 52.8 million. The Company expects the balance of cash and cash equivalents to be sufficient to
meet its obligations for at least the next 12 months from the issuance of these consolidated financial statements.

 Concentration of Credit Risk and Significant
Customers

 The Company routinely assesses the financial
strength of its customers. As a result, the Company believes that its accounts receivable credit risk exposure is limited. As of July 31,
2025, two third-party customers and one related-party tenant represented 26 %, 11 %, and 11 % of the Company's accounts receivable
balance, respectively. As of July 31, 2024, there was one related-party tenant which represented 50 % of the Company's accounts
receivable balance.

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

 For the year ended July 31, 2024, one third-party
customer, one third-party tenant and one related-party tenant represented 51 %, 27 % and 17 % of the Company's total revenue, respectively.

 Major Vendors

 Following the Cyclo Merger, one major vendor made
up 38 % of research and development expenses for the year ended July 31, 2025.

 Cash and Cash Equivalents

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

 Reserve for Receivables

 The allowance for credit losses reflects the
Company's best estimate of lifetime credit losses inherent in the accounts receivable balance. The allowance is determined based
on known troubled accounts, historical experience and other currently available evidence. Doubtful accounts are written off upon final
determination that the trade accounts will not be collected. The computation of this allowance is based on the tenants' or customers'
payment histories, as well as certain industry or geographic specific credit considerations. If the Company's estimates of collectability
differ from the cash received, then the timing and amount of the Company's reported revenue could be impacted. The Company did
not recognize any credit loss expense during the year ended July 31, 2025 and recognized $ 20 thousand of credit loss expense during the
year ended July 31, 2024.

 Inventory and Cost of Goods Sold

 Inventory consists of cyclodextrin products and
chemical complexes purchased for resale recorded at the lower of cost (first-in, first-out) or net realizable value. Included in inventory
is inventory acquired in the Cyclo Merger that was recognized at its fair value of $ 270 thousand on the date of the Merger. Cost of products
sold includes the acquisition cost of the products sold. The Company records a specific reserve for inventory items that are determined
to be obsolete. The Company determined no reserve for obsolete inventory was necessary as of July 31, 2025. The Company did not have
any inventory as of July 31, 2024.

 Prepaid Clinical Expenses

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

 F- 12

 Convertible Notes Receivable

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

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

 Variable Interest Entities

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

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

 Investments

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

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

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

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

 F- 13

 Equity Method Investments

 Investments accounted for under the equity method
consist of investments in companies in which the Company is able to exercise significant influence but not control. Under the equity
method of accounting, the investment is initially recorded at cost, then the Company's proportional share of investee's underlying
net income or loss is recorded as a component of income from operations, with a corresponding increase or decrease to the carrying value
of the investment. These investments are evaluated for impairment if events or circumstances arise that indicate that the carrying amount
of such assets may not be recoverable.

 The Company has determined that RP Finance and
Day Three are VIEs. Prior to the RP Finance Consolidation, which occurred as a result of the Cornerstone Acquisition, and the Day Three
Acquisition, the Company accounted for RP Finance and Day Three under the equity method of accounting. Since January 2, 2024, Day Three
has been consolidated as a majority-owned subsidiary. In conjunction with the Cornerstone Acquisition on March 13, 2024, the Company
reassessed its relationship with RP Finance and, as a result, the Company has consolidated RP Finance.

 Cost Method Investment

 Prior to the Cornerstone Acquisition, the Company
had determined that Cornerstone was a VIE; however, the Company determined that it was not the primary beneficiary as the Company did
not have the power to direct the activities of Cornerstone that most significantly impact Cornerstone's economic performance. See
Note 6 for additional information.

 Investments - Hedge Funds

 The Company accounted for its previously held
investments in hedge funds in accordance with ASC 321, Investments – Equity Securities. Unrealized gains and losses resulting
from the change in fair value of these securities are included in unrealized loss on investments - Hedge Funds in the consolidated statements
of operations and comprehensive loss. During the year ended July 31, 2025, the Company withdrew its remaining balance in Hedge Fund Investments.

 Corporate Bonds and US Treasury Bills

 The Company's marketable securities are
considered to be available-for-sale as defined under ASC 320, Investments - Debt and Equity Securities, and are recorded at fair
value. Unrealized gains or losses are included in accumulated other comprehensive loss. Realized gains or losses are determined using
the specific identification method and are released from accumulated other comprehensive loss and into earnings on the consolidated statements
of operations and comprehensive loss.

 The Company uses a current expected credit losses
("CECL") model to estimate the allowance for credit losses on available-for-sale debt securities. For available-for-sale
debt securities in an unrealized loss position, management first assesses whether it intends to sell, or it is more likely than not that
it will be required to sell, the security before recovery of its amortized cost basis. If either of the criteria regarding intent or
requirement to sell is met, the security's amortized cost basis is written down to fair value through income. For available-for-sale
debt securities that do not meet the aforementioned criteria, the Company evaluates whether the decline in fair value has resulted from
credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized
cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among
other factors.

 If this assessment indicates that a credit loss
exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security.
If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance
for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any
decline in fair value that has not been recorded through an allowance for credit losses is recognized in other comprehensive income.
 No allowance for credit losses on available-for-sale securities was recognized by the Company at July 31, 2025 nor July 31, 2024.

 F- 14

 Long-Lived Assets

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

 Classification

 Years

 Building and improvements

 Tenant improvements

 7 - 15

 Machinery and equipment

 3 - 5

 Other (primarily office equipment, furniture and fixtures)

 Properties

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

 Business Combinations

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

 Impairment of Long-Lived Assets

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

a layoff within the Company's Infusion Technology segment, the Company concluded that a triggering event occurred during November
2024 under ASC 360 that required the Company to evaluate long-lived assets within the Infusion Technology segment for potential impairment.
Accordingly, the Company completed an analysis pursuant to ASC 360 and determined that the expected undiscounted cash flows of the asset
group exceeded its carrying amount, indicating that the long-lived assets were not impaired.

 For the years ended July 31, 2025 and 2024, the
Company determined there was no impairment of its long-lived assets.

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

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

 F- 15

a layoff within the Company's Infusion Technology segment, the Company concluded that a triggering event occurred during November
2024 under ASC 350, Intangibles - Goodwill and Other ("ASC 350"), that required the Company to assess if there was
an impairment. In accordance with ASC 350, the Company performed a quantitative goodwill impairment test, which indicated that the carrying
amount of the reporting unit exceeded the estimated fair value of the reporting unit, indicating that the goodwill of the reporting unit
was impaired. The Company recorded an impairment charge of $ 3.1 million related to the Infusion Technology segment's goodwill during
the year ended July 31, 2025. See Note 18 for further information.

 In-Process Research and Development

 The Company has acquired in-process research
and development ("IPR&D") intangible assets pursuant to a business combination. These IPR&D assets are considered
indefinite-lived intangible assets until completion or abandonment of the associated research and development efforts. These IPR&D
assets are not amortized but reviewed for impairment analysis on an annual basis on May 31, or when events or changes in the business
environment indicate the carrying value may be impaired. The process of evaluating the potential impairment of IPR&D requires significant
judgment. In performing the Company's annual IPR&D impairment test, the Company is permitted to first assess qualitative factors
to determine whether it is more likely than not that the fair value of any of the Company's reporting units is less than its carrying
amount, including IPR&D. In performing the qualitative assessment, the Company considers the results of clinical trials, among other
factors, when evaluating whether the IPR&D is impaired. For the years ended July 31, 2025 and 2024, the Company determined
there was no impairment of its long-lived IPR&D assets.

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

 Clinical Trial Accruals

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

 Revenue Recognition

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

 Infusion Technology Revenue:

 The Company's Infusion Technology revenue
is derived from Day Three's Unlokt technology which is recognized in accordance with ASC 606. Day Three provides manufacturing
services where they use proprietary technology, equipment, and processes to manufacture water-soluble product for their customers at
their customer facilities. Day Three is acting as a principal in the transaction, as it is primarily responsible for fulfillment and
acceptability of the services. Infusion Technology revenue is recognized over time as the Company's performance obligation is satisfied,
which is generally within a 30-day period. The criterion in ASC 606-10-25-27, that the entity's performance creates or enhances
an asset that the customer controls as the asset is created or enhanced, is met given that the customer is controlling the product as
Day Three is performing the service on the customer's premises. Revenue is recognized over the period of performance using an output
method where the number of grams produced is the output, as such method best depicts the Company's efforts to satisfy the performance
obligation. Customer billings in advance of revenue recognition result in contract liabilities. As of July 31, 2025, there were
 no contract liabilities recognized on the consolidated balance sheets related to Infusion Technology revenue.

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

 Rental Revenue:

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

 F- 16

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

 Product Revenue:

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

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

 Research and Development Costs

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

 Contingent milestone payments associated with
acquiring rights to intellectual property are recognized when probable and estimable. These amounts are recorded as research and development
expense when there is no alternative future use associated with the intellectual property. There were no such payment expenses during
the years ended July 31, 2025 and 2024.

 Stock-Based Compensation

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

 Income Taxes

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

 F- 17

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

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

 Contingencies

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

 Fair Value Measurements

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

 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.

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

 Functional Currency

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

 Warrants

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

 F- 18

 Loss Per Share

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

 Recently Adopted Accounting Pronouncements

 In August 2020, the FASB issued Accounting Standard
Update ("ASU") No. 2020-06, Accounting for Convertible Instruments and Contracts in an Entity's Own Equity ("ASU
2020-06"), which simplifies an issuer's accounting for convertible instruments by reducing the number of accounting models
that require separate accounting for embedded conversion features. ASU 2020-06 also simplifies the settlement assessment that entities
are required to perform to determine whether a contract qualifies for equity classification and makes targeted improvements to the disclosures
for convertible instruments and earnings-per-share ("EPS") guidance. This update is effective for the Company's fiscal
years beginning after December 15, 2023, and interim periods within those fiscal years. The Company adopted the standard effective August
1, 2024. The adoption did not have a material impact on the Company's consolidated financial statements.

 In November 2023, the Financial Accounting Standards
Board ("FASB") issued ASU 2023-07, with the goal of enhancing segment disclosures under Topic 280, Segment Reporting,
 which requires public entities to disclose significant segment expenses regularly provided to the chief operating decision-maker.
Public entities with a single reporting segment have to provide all disclosures required by ASC 280, including the significant segment
expense disclosures. This update is applicable for all public entities. The amendments in this Update are effective for fiscal years
beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.
The Company adopted the provisions of ASU 2023-07 as of July 31, 2025 on a retrospective basis. The adoption did not have a material
impact on the consolidated financial statements, refer to Note 22, Business Segment Information.

 Recently Issued Accounting Standards Not Yet
Adopted

 In December 2023, the FASB issued ASU 2023-09,
 Income Taxes (Topic 740): I mprovements to Income Tax Disclosures, which requires disaggregated information about a reporting
entity's effective tax rate reconciliation as well as information on income taxes paid. The guidance is effective for the Company's
fiscal year ending July 31, 2026, with early adoption permitted. The Company is currently evaluating the potential impact that this standard
may have on its consolidated financial statements and related disclosures.

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

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

 F- 19

 NOTE 3 - CYCLO MERGER

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

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

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

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

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

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

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

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

 Fair value of consideration

 (i) Fair value of Rafael common shares issued 1

 $
 14,692

 Fair value of Rollover Options 2

 Fair value of Replacement Warrants 3

 Cash paid to extinguish warrants 4

 3,586

 Fair value of the Cyclo Convertible Notes which were forgiven 5

 21,472

 (ii) Fair value of noncontrolling interests

 —

 (iii) Fair value of previously held equity interests 6

 9,367

 Total consideration

 $
 49,949

 (1)
 The fair value of the 7,132,228 shares of Rafael Class B common stock issued was measured utilizing the share price of Rafael's Class B common stock of $ 2.06, which was the closing share price on March 25, 2025.

 (2)
 Represents the fair value-based measure of the Rollover Options issued by the Company that is attributable to pre-Merger vesting based on the fair-value-based measure of the Cyclo Options over the requisite service period. The fair value of the Rollover Options was measured utilizing a share price of Rafael Class B common stock of $ 2.06 and the pre-Merger fair value of the historical Cyclo Options was measured utilizing a share price of Cyclo Common Stock of approximately $ 0.72, which were their respective closing share prices on March 25, 2025.

 F- 20

 (3)
 Represents the fair value of the Replacement Warrants that were measured utilizing a share price of Rafael's Class B common stock of $ 2.06, which was the closing share price on March 25, 2025.

 (4)
 Represents the cash-settlement amount paid to the holders of certain Cyclo Warrants that exercised their rights under provisions within their warrant agreements that granted the holders an option to elect cash-settlement upon certain events. The Merger with Cyclo triggered the option to elect cash-settlement and certain holders of these certain warrants elected to receive cash payment in lieu of receiving warrants to purchase Rafael Class B common stock.

 (5)
 Represents the outstanding principal and accrued interest on the Cyclo Convertible Notes which were forgiven as part of the Merger. At the Closing Date of the Merger, the fair value of the Cyclo Convertible Notes equaled the outstanding principal and accrued interest of $ 21.5 million.

 (6)
 Rafael's Prior Investment in Cyclo, as defined in Note 4, represents previously held equity interests in Cyclo that were included in the purchase price at their fair values as of the closing of the Merger. Rafael's ownership of 12,998,194 shares of Cyclo Common Stock prior to the Merger was valued at $ 9.4 million based on the share price of Cyclo Common Stock of approximately $ 0.72, which was the closing share price on March 25, 2025. The Rafael-Owned Cyclo Warrants are ascribed a fair value of $ 0 in the measurement of previously held equity interests above as their exercise prices were greater than the share price of Cyclo Common Stock of approximately $ 0.72, which was the closing share price on March 25, 2025 and the Rafael-Owned Cyclo Warrants were cancelled at the consummation of the Merger.

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

 Assets acquired and liabilities assumed

 Cash

 $

 Accounts receivable

 Inventory

 2,690

 Property and equipment

 Prepaid expenses, noncurrent

 1,041

 Other assets

 Other receivable

 Intangible assets - customer relationships

 1,040

 Acquired In Process Research & Development (IPR&D)

 30,000

 Accounts payable

 ( 5,208
)

 Accrued expenses

 ( 1,464
)

 Other current liabilities

 ( 20
)

 Deferred tax liabilities

 ( 303
)

 Other liabilities

 ( 7
)

 Total identifiable net assets acquired

 $
 30,010

 $

 The preliminary fair values of the assets
acquired and liabilities assumed in the Merger are subject to change as the Company performs additional reviews of the assumptions
utilized. During the fourth quarter ended July 31, 2025, the Company recognized a measurement period adjustment to reflect an
acquired other receivable of $ 933 thousand representing Employee Retention Credits due to Cyclo (see Note 26), with a corresponding
decrease to goodwill. In addition, the Company recognized a measurement period adjustment to reduce the balances of acquired prepaid
expenses and assumed accounts payable by $ 551 thousand to align the recognition and classification of prepaid expenses with the
Company's accounting policies. During the measurement period, Cyclo conducted a federal and state valuation allowance analysis
to align deferred tax liability reversals with the expected use of deferred tax assets. This included considerations for Section 382
limitations and changes made to Net Operating Loss (NOL) deductions by the Tax Cuts and Jobs Act. Based on the analysis, the Company
recognized a measurement period adjustment which decreased the deferred tax liability by $ 8.699 million on Cyclo's opening
balance sheet, with an offset to goodwill. As discussed in Note 2 – Summary of Significant Accounting Policies – Out of
Period Correction, the Company also recognized an out of period correction to account for additional assumed accrued liabilities as
of the Merger date. The correction resulted in an increase to assumed accrued liabilities of $ 1.293 million, with a corresponding
increase to goodwill.

 F- 21

 Further adjustments may be necessary as additional
information related to the fair values of assets acquired, liabilities assumed, and tax implications thereon is assessed during the measurement
period (up to one year from the acquisition date). The final purchase accounting will be completed within the one-year measurement period
following the Closing Date of the Merger.

 The Company incurred transaction costs of $ 1.0
million and $ 0.1 million for the years ended July 31, 2025 and 2024, respectively, for consulting, legal, accounting, and other professional
fees that have been expensed as general and administrative expenses, as incurred, in connection with the Merger.

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

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

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

 Post-Merger operating results

 The following table reflects Cyclo's revenue
and loss from operations included in Rafael's consolidated statement of operations subsequent to the Closing Date of the Merger:

 Year ended July 31,

 2025

 Product revenue

 $

 ( 11,324
)

 Pro Forma Financial Information

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

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

 2025

 2024

 Revenue

 $
 2,046

 $
 1,769

 ( 59,786
)

 ( 126,267
)

 Net loss attributable to common stockholders

 ( 53,841
)

 ( 59,273
)

 The pro forma loss from operations for the year
ended July 31, 2024 includes $ 2.4 million of transaction costs related to the Merger, of which $ 1.4 million was incurred by Cyclo and
$ 1.0 million was incurred by Rafael.

 F- 22

 NOTE 4 – INVESTMENT IN CYCLO THERAPEUTICS, LLC.

 On May 2, 2023, the Company entered into a Securities
Purchase Agreement with Cyclo (the "Cyclo SPA"). The Company purchased from Cyclo (i) 2,514,970 common shares (the "Purchased
Shares") and (ii) a warrant to purchase 2,514,970 common shares with an exercise price of $ 0.71 per share (the "May Warrant"),
at a combined purchase price of $ 0.835 for one Purchased Share and a May Warrant to purchase one share, for an aggregate purchase price
of $ 2.1 million. The May Warrant was exercisable until August 1, 2030.

 On August 1, 2023, pursuant to a Securities Purchase
Agreement (the "Cyclo II SPA") dated June 1, 2023, the Company purchased an additional 4,000,000 shares of common stock (the
"Cyclo II Shares"), and received a warrant to purchase an additional 4,000,000 Shares (the "Cyclo II Warrant"),
for an aggregate purchase price of $ 5,000,000. The Cyclo II Warrant had an exercise price of $ 1.25 per share and was exercisable until
August 1, 2030.

 On October 20, 2023, the Company exercised the
May Warrant to purchase 2,514,970 common shares at an exercise price of $ 0.71 per share, pursuant to a Securities Purchase Agreement
dated October 20, 2023, and received a new warrant (the "Cyclo III Warrant") to purchase 2,766,467 common shares at an exercise
price of $ 0.95 per share. The Cyclo III Warrant was exercisable until October 20, 2027. Both the Cyclo II Warrant and Cyclo III Warrant
(collectively, the "Rafael-Owned Cyclo Warrants") are subject to the restriction that exercise(s) do not convey more than
 49 % ownership to the Company (the "Cyclo Blocker"). Upon exercise of the May Warrant, the Company recognized a realized gain
of $ 424 thousand.

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

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

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

 Prior to the Merger, Rafael's ownership
of 12,998,194 shares of outstanding Cyclo Common Stock and the Rafael-Owned Cyclo Warrants are collectively referred to herein as "Rafael's
Prior Investment in Cyclo". The total aggregate fair value of Rafael's Prior Investment in Cyclo is included as "Investments
- Cyclo", on Rafael's consolidated balance sheets.

 The Company elected to account for its investment
in Cyclo under the fair value option, with subsequent changes in fair value recognized as Unrealized (gain) loss on investment - Cyclo
in the consolidated statements of operations and comprehensive loss. During the year ended July 31, 2025, the Company recognized unrealized
losses of $ 5.1 million related to its investment in Cyclo common stock and warrants attributed to the decrease in the market price of
Cyclo's common stock prior to the Cyclo Merger. During the year ended July 31, 2024, the Company recognized an unrealized gain
of $ 37 thousand related to its investment in Cyclo common stock and warrants.

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

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

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

 F- 23

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

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

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

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

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

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

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

 F- 24

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

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

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

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

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

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

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

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

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

 F- 25

 NOTE 6 - CORNERSTONE RESTRUCTURING, CORNERSTONE ACQUISITION, AND
RP FINANCE CONSOLIDATION

 Prior to the Cornerstone Restructuring, Rafael
(directly via certain of its subsidiaries, and through an equity method investment in RP Finance) held certain debt and equity investments
in Cornerstone, which are described in Note 7.

 Restructuring of Cornerstone

 On March 13, 2024, Rafael, Cornerstone, and other
holders of debt and equity securities of Cornerstone agreed to various transactions which effected a recapitalization and restructuring
of the outstanding debt and equity interests in Cornerstone. In the Cornerstone Restructuring, Rafael obtained shares of common stock
of Cornerstone ("Cornerstone Common Stock") that gave the Company control over approximately 67 % of the outstanding voting
interests of Cornerstone (the "Cornerstone Acquisition"). For accounting purposes, Rafael was determined to be the acquirer,
as the Company has been determined to be the primary beneficiary of Cornerstone, a VIE, in accordance with ASC 810. For Rafael, the Cornerstone
Acquisition is the result of the Cornerstone Restructuring. As part of the Cornerstone Restructuring:

 (i) All issued and outstanding
shares of Cornerstone's preferred stock and non-voting common stock converted into shares of Cornerstone Common Stock (the "Mandatory
Common Conversion") on a one-for-one basis, which shares of Cornerstone Common Stock were then subjected to the Reverse Stock Split
(as defined below), including the conversion of Rafael's 60,673,087 shares of Cornerstone's Series D Preferred Stock into
 6,067,306 shares of post-Reverse Stock Split Cornerstone Common Stock;

 (ii) Cornerstone offered
shares of Cornerstone's Common Stock to all holders of Cornerstone's promissory notes convertible into Cornerstone Series
C preferred stock (the "Series C Convertible Notes") who were Accredited Investors with the purchase price to be paid through
conversion of the outstanding principal amount and accrued interest on their Series C Convertible Notes held by each holder into Common
Stock at the Cornerstone Restructuring Common Stock Price as described below (the "Series C Convertible Notes Exchange").
Approximately 94 % of the outstanding Series C Convertible Notes participated in the Series C Convertible Notes Exchange, and $ 15.5 million
of principal and accrued interest outstanding on the Series C Convertible Notes was converted into 15,739,661 shares of post-Reverse
Stock Split Cornerstone Common Stock. Series C Convertible Notes with an aggregate principal and accrued interest amount of $ 0.9 million
remaining outstanding, of which Series C Convertible Notes with an aggregate principal and accrued interest amount of $ 93 thousand were
amended in the Cornerstone Restructuring to (A) extend the maturity date thereof to May 31, 2028 and (B) provide that, on conversion
thereof, the converting holder will receive shares of Cornerstone Common Stock. The holders of these amended Series C Convertible Notes
that remain outstanding waived such holders' rights in connection with the Cornerstone Restructuring. Series C Convertible Notes
with an aggregate principal and accrued interest amount of $ 0.8 million remained outstanding and were not amended in connection with
the Cornerstone Restructuring. The principal and accrued interest are included in Convertible Notes on the consolidated balance sheets;

 (iii) Rafael converted the
approximately $ 30.6 million of the outstanding principal and accrued interest under the RFL Line of Credit (as defined in Note 6) into
 30,080,747 shares of post-Reverse Stock Split Cornerstone Common Stock. The conversion of the RFL Line of Credit, inclusive of accrued
interest, into equity in Cornerstone represents a recovery of a previously written-off asset, and the Company recorded the recovery in
accordance with ASC 326, by recognizing a gain of $ 30.6 million, in conjunction with and immediately prior to the Cornerstone Restructuring
equal to the fair value of the Cornerstone Common Stock, up to the amount of principal and accrued interest on the instrument, that was
received in settlement of the RFL Line of Credit in connection with the Cornerstone Restructuring. Upon the consummation of the Cornerstone
Acquisition, the investment was eliminated as Cornerstone became a majority-owned subsidiary of Rafael and the difference between the
investment's carrying value and its fair value included in purchase consideration, which is based on the value of Cornerstone's
Common Stock, resulted in a gain of $ 7.3 million that was recorded to the Company's additional paid-in capital given the related
party nature of the transaction;

 (iv) Rafael converted the
approximately $ 2.1 million of the outstanding principal and accrued interest pursuant to the 2023 Promissory Note (as defined in Note
6) into 2,116,932 shares of post-Reverse Stock Split Cornerstone Common Stock. Prior to the Cornerstone Restructuring, the Company recorded
the 2023 Promissory Note at its fair value as the security was classified as available-for-sale. The 2023 Promissory Note is included
in the consideration paid at its fair value (which was deemed to be the fair value of the Cornerstone Common Stock received) in the Cornerstone
Acquisition in accordance with ASC 810-10-30-4. The Company recognized a gain of $ 0.6 million for the realization of previously unrealized
gains on the fair value of the 2023 Promissory Note in other comprehensive loss;

 F- 26

 (v) Cornerstone and RP Finance
amended the RPF Line of Credit (as defined in Note 7) to (i) extend the maturity date of the approximately $ 21.9 million in borrowings
thereunder to May 31, 2028, (ii) limit the number of shares to be issued thereunder in respect of anti-dilution protection provided for
therein in connection with the Cornerstone Restructuring and to provide RP Finance 3,658,368 shares of post-Reverse Stock Split Cornerstone
Common Stock so that following the Cornerstone Restructuring, RP Finance holds six percent ( 6 %) of the outstanding Common Stock of Cornerstone
(the "RPF 6% Top Up Shares"), (iii) terminate any anti-dilution protection in respect of such ownership interest following
consummation of the Cornerstone Restructuring, and (iv) terminate all future lending obligations of RP Finance under the RPF Line of
Credit (as so amended, the "Amended RPF Line of Credit");

 (vi) Rafael invested an additional
$ 1.5 million in cash in exchange for 1,546,391 shares of post-Reverse Stock Split Cornerstone Common Stock;

 (vii) Cornerstone amended
and restated its certificate of incorporation, to, among other things, effect a reverse split of all of Cornerstone's capital stock
on a one-for-ten basis (the "Reverse Stock Split"), set the number of authorized shares of Cornerstone Common Stock to be
sufficient for issuance of the Common Stock in the Cornerstone Restructuring and eliminate the authorized preferred stock not required
to be authorized as a result of the Mandatory Common Conversion;

 (viii) Cornerstone amended
prior agreements in place giving certain parties rights to designate members of the Board and those rights have been eliminated. All
directors are elected by the Cornerstone stockholders and as the majority stockholder, Rafael can control that vote. The Company has
entered into a voting agreement (the "Voting Agreement") whereby Rafael has agreed to maintain three directors of Cornerstone
that are independent of Rafael; and

 (ix) Cornerstone increased
the available reserve of Cornerstone Common Stock for grant to employees, consultants and other service providers to approximately 10 %
of Cornerstone's fully diluted capital stock (the "Reserve Increase").

 Acquisition of Cornerstone

 As a result of the Cornerstone Restructuring,
Rafael became a 67 % owner of the issued and outstanding Common Stock of Cornerstone, which became a consolidated subsidiary of Rafael.
The Cornerstone Acquisition is accounted for as an acquisition of a VIE that is not a business in accordance with U.S. GAAP. The Company
was determined to be the accounting acquirer for financial reporting purposes. The guidance requires an initial screen test to determine
if substantially all of the fair value of the gross assets acquired is concentrated in a single asset or group of similar assets. If
that screen test is met, the acquired entity is not a business for financial reporting purposes. Accordingly, the Cornerstone Acquisition
was accounted for as an asset acquisition as substantially all of the fair value of Cornerstone's gross assets is concentrated
within in-process research and development, an intangible asset.

 Under ASC 810, the initial consolidation of a
VIE shall not result in goodwill being recognized, and the acquirer shall recognize a gain or loss for the difference of (a) the sum
of (i) the fair value of any consideration paid, (ii) the fair value of any noncontrolling interests, and (iii) the reported amount of
any previously held interests, and (b) the net amount of the VIE's identifiable assets and liabilities recognized and measured
in accordance with ASC 805. In accordance with the calculation within ASC 810, no gain or loss was recognized on the Cornerstone Acquisition.

 The net amount of the VIE's identifiable
assets and liabilities recognized with respect to the Cornerstone Acquisition is based upon management's preliminary estimates
of and assumptions related to the fair values of assets acquired and liabilities assumed, using currently available information. For
this purpose, fair value shall be determined in accordance with the fair value concepts defined in ASC 820, Fair Value Measurements
and Disclosure s.

 F- 27

ASC 810, the sum of (i) the fair value of consideration paid, (ii) the fair value of noncontrolling interests, and (iii) the reported
amount of previously held interests (amounts in thousands):

 Fair value of consideration paid

 Fair value of RFL Line of Credit

 $
 37,845

 Fair value of 2023 Promissory Note

 2,663

 Cash consideration

 1,500

 (i) Total fair value of consideration paid

 42,008

 (ii) Fair value of noncontrolling interests

 27,501

 (iii) Reported value of previously
 held interests (1)

 —

 Sum of (i), (ii), and (iii)

 $
 69,509

 (1)
 Rafael's interest in the Series D Preferred Stock of Cornerstone, that was converted into Cornerstone Common Stock in the Cornerstone Restructuring, represents a previously held interest in Cornerstone that is included at its reported amount, or $ 0.

ASC 810, the net amount of the VIE's identifiable assets and liabilities recognized and measured in accordance with ASC 805 (amounts
in thousands):

 Assets acquired and liabilities assumed

 Cash and cash equivalents

 $
 2,756

 Property and equipment

 Other assets

 Acquired IPR&D

 89,861

 Accounts payable

 ( 2,006
)

 Accrued expenses

 ( 1,188
)

 Series C Convertible Notes, short-term portion

 ( 614
)

 Due to related parties

 ( 1,289
)

 Other current liabilities

 ( 28
)

 Series C Convertible Notes, long-term portion

 ( 70
)

 Creditor payable, noncurrent

 ( 2,745
)

 Amended RPF Line of Credit

 ( 15,336
)

 Other liabilities

 ( 20
)

 Total

 $
 69,509

 In accordance with the calculation within ASC
810, no gain or loss was recognized on the initial consolidation of Cornerstone. The Company incurred transaction costs of $ 716 thousand
during the year ended July 31, 2024 for consulting, legal, accounting, and other professional fees that have been expensed as general
and administrative expenses as part of the Cornerstone Restructuring, Cornerstone Acquisition, and RP Finance Consolidation.

 The Company recognized a gain in the amount of
$ 720 thousand during the quarter ended April 30, 2024 on the reversal of a reserve on a receivable due from Cornerstone, which was fully
reserved for by the Company due to the Data Events. This receivable balance is then eliminated in consolidation against the corresponding
payable balance acquired from Cornerstone recorded in Cornerstone's Due to related parties balance in the assets acquired and liabilities
assumed in the Cornerstone Acquisition.

 To value the IPR&D, the Company utilized
the Multi-Period Excess Earnings Method ("MPEEM"), under the Income Approach. The method reflects the present value of the
projected operating cash flows generated by Cornerstone's assets after taking into account the cost to realize the revenue, and
an appropriate discount rate to reflect the time value and risk associated with the invested capital. IPR&D acquired represents Cornerstone's
research and development activities related to oncology-focused pharmaceuticals which seeks to exploit the metabolic differences between
normal cells and cancer cells.

 IPR&D represents the R&D asset of Cornerstone which is in-process,
but not yet completed, and which has no alternative use. As the Cornerstone Acquisition has been accounted for as an acquisition of a
VIE that is not a business, it was determined that the fair value of the IPR&D asset acquired with no alternative future use should
be charged to IPR&D expense at the acquisition date. The acquired IPR&D of $ 89.9 million was expensed during the year ended July
31, 2024.

 F- 28

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

 The creditors of Cornerstone do not have legal
recourse to the Company's general credit.

 Consolidation of RP Finance

 RP Finance, an entity in which the Company owns
a 37.5 % equity interest (previously accounted for as an equity method investment of Rafael), and in which an entity associated with members
of the family of Howard Jonas holds an additional 37.5 % equity interest, holds debt and equity investments in Cornerstone (which is included
in the Company's 67 % equity ownership interest in Cornerstone). In conjunction with the Cornerstone Acquisition, the Company reassessed
its relationship with RP Finance and, as a result of the Cornerstone Restructuring and resulting Cornerstone Acquisition, determined
that RP Finance is still a VIE and that the Company is now considered the primary beneficiary of RP Finance as the Company now holds
the ability to control repayment of the RPF Line of Credit, which directly impacts RP Finance's economic performance. Therefore,
the Company has consolidated RP Finance as a result of the Cornerstone Acquisition (the "RP Finance Consolidation"). The
RP Finance Consolidation is accounted for as an acquisition of a VIE that is not a business in accordance with U.S. GAAP as RP Finance
does not meet the definition of a business under U.S. GAAP.

 Under ASC 810, the initial consolidation of a
VIE shall not result in goodwill being recognized, and the acquirer shall recognize a gain or loss for the difference of (a) the sum
of (i) the fair value of any consideration paid, (ii) the fair value of any noncontrolling interests, and (iii) the reported amount of
any previously held interests, and (b) the net amount of the VIE's identifiable assets and liabilities recognized and measured
in accordance with ASC 805.

ASC 810, the sum of (i) the fair value of consideration paid, (ii) the fair value of noncontrolling interests, and (iii) the reported
amount of previously held interests (amounts in thousands):

 (i) Fair value of consideration paid

 $
 —

 (ii) Fair value of noncontrolling interests

 12,667

 (iii) Reported value of previously
 held interests (1)

 —

 Sum of (i), (ii), and (iii)

 $
 12,667

 (1)
 Rafael ownership of 37.5 % of the equity interests in RP Finance, accounted for as an equity method investment prior to the RP Finance Consolidation, represents a previously held interest in Cornerstone that is included at its reported amount, or $ 0.

ASC 810, the net amount of the VIE's identifiable assets and liabilities recognized and measured in accordance with ASC 805 (amounts
in thousands):

 Assets acquired and liabilities assumed

 Investments - Cornerstone common stock

 $
 4,931

 Due from Cornerstone - Amended RPF Line of Credit

 15,336

 Total

 $
 20,267

 In accordance with the calculation within ASC
810, a gain of $ 7.6 million was recognized as an adjustment to Rafael's additional paid-in capital, due to the related parties
involved, upon the RP Finance Consolidation. The acquired RP Finance investment in Cornerstone of $ 4.9 million, consisting of the fair
value of RP Finance's 3,919,598 shares of post-Reverse Stock Split Cornerstone Common Stock, is eliminated in consolidation, as
Cornerstone is a consolidated subsidiary of Rafael with a corresponding decrease of $ 1.8 million to Rafael's additional paid-in
capital and corresponding decrease of $ 3.1 million to noncontrolling interests, equivalent to their respective proportionate ownership
interest in RP Finance's shares of Cornerstone Common Stock.

 F- 29

 The Company assumed Cornerstone's liability
to RP Finance under the Amended RPF Line of Credit at its fair value in the Cornerstone Acquisition and acquired RP Finance's receivable
from Cornerstone under the Amended RPF Line of Credit at its fair value in the RP Finance Consolidation. These intercompany amounts are
eliminated in consolidation.

 IPR&D Sale

 On February 5, 2025, Cornerstone entered into
an Asset Purchase Agreement with Synhale Therapeutics, pursuant to which Cornerstone sold and assigned certain assets, rights, and obligations.
The assets transferred include products, intellectual property, assigned agreements, acquired data, and regulatory filings, among others,
which were previously charged to IPR&D expense. The total purchase price for these assets consists of an upfront payment of $ 100
thousand, with potential milestone payments. Cornerstone recognized a gain on sale of $ 100 thousand which is included in other income,
net in the consolidated statements of operations and comprehensive loss.

 NOTE 7 – INVESTMENT IN CORNERSTONE

 Cornerstone is a clinical stage, cancer metabolism-based
therapeutics company focused on the development and commercialization of therapies that seeks to exploit the metabolic differences between
normal cells and cancer cells.

 Prior to the Cornerstone Restructuring described
in Note 6, Rafael (directly via certain of its subsidiaries, and through an equity method investment in RP Finance) held certain debt
and equity investments in Cornerstone which included:

 (a) 44.0 million shares of
Series D Preferred Stock of Cornerstone held by Pharma Holdings LLC ("Pharma Holdings"), a 90 % owned non-operating subsidiary
of the Company, and 16.7 million shares of Series D Preferred Stock of Cornerstone held by CS Pharma Holdings LLC ("CS Pharma"),
a non-operating subsidiary of the Company (the "Series D Preferred Stock"). Pharma Holdings owns 50 % of CS Pharma. Accordingly,
the Company holds an effective 45 % indirect interest in the assets held by CS Pharma. The Company serves as the managing member of Pharma
Holdings, and Pharma Holdings serves as the managing member of CS Pharma, with broad authority to make all key decisions regarding their
respective holdings. Any distributions that are made to CS Pharma from Cornerstone that are in turn distributed by CS Pharma will need
to be made pro rata to all members, which would entitle Pharma Holdings to 50 % (based on current ownership) of such distributions. Similarly,
if Pharma Holdings were to distribute proceeds it receives from CS Pharma, it would do so on a pro rata basis, entitling the Company
to 90 % (based on current ownership) of such distributions. Due to the Data Events, the Company previously recorded a full impairment
of the value of the Series D Preferred Stock included in the Company's cost method investment in Cornerstone;

 (b) a loan of $ 25 million
by the Company to Cornerstone under a Line of Credit Agreement (the "RFL Line of Credit"). Due to the Data Events, the Company
previously recorded a full reserve on the $ 25 million in principal due to the Company, and on the accrued interest, from Cornerstone;

 (c) a $ 2 million promissory
note (the "2023 Promissory Note") from Cornerstone, bearing interest at a rate of seven and one-half percent ( 7.5 %) per annum,
held by the Company. The 2023 Promissory Note was secured by a first priority security interest in all of Cornerstone's right,
title and interest in and to all of the tangible and intangible assets purchased by Cornerstone pursuant to the purchase agreement between
Cornerstone and Calithera Biosciences, Inc. ("Calithera"), which was a clinical-stage, precision oncology biopharmaceutical
company that was developing targeted therapies to redefine treatment for biomarker-specific patient populations, and all proceeds therefrom
and all rights to the data related to CB-839 (the "Collateral"). The Company recorded the 2023 Promissory Note at fair value
and the security was classified as available-for-sale prior to the Cornerstone Restructuring;

 (d) a $ 720 thousand receivable
balance due from Cornerstone, which was fully reserved for by the Company due to the Data Events; and

 (e) loans in the aggregate
amount of $ 21.9 million by RP Finance to Cornerstone under a Line of Credit Agreement which provided for a revolving commitment of up
to $ 50 million to fund clinical trials and other capital needs (the "RPF Line of Credit", see Note 7). The Company owns 37.5 %
of the equity interests in RP Finance and was required to fund 37.5 % of funding requests from Cornerstone under the RPF Line of Credit.
RP Finance also holds 261,230 post-Reverse Stock Split shares of Cornerstone Common Stock ("RPF Historical Cornerstone Shares"),
issued to RP Finance in connection with entering into the RPF Line of Credit representing 12 % of the issued and outstanding shares of
Cornerstone Common Stock prior to the Cornerstone Restructuring, with such ownership interest subject to anti-dilution protection as
set forth in the RPF Line of Credit agreement. The Company accounted for its investment in RP Finance under the equity method.

 F- 30

 Due to the Data Events on October 28, 2021, the
Company recorded a full impairment for the assets recorded related to Rafael's cost method investment in Cornerstone, the amounts
due to Rafael under the RFL Line of Credit, and its investment in RP Finance.

 A trust for the benefit of the children of Howard
Jonas (Chairman of the Board and Executive Chairman and former Chief Executive Officer of the Company and Member of the Board of Cornerstone)
holds a financial instrument (the "Instrument") that owns 10 % of Pharma Holdings. The Instrument holds a contractual right
to receive additional shares of Cornerstone capital stock equal to 10 % of the fully diluted capital stock of Cornerstone (the "Bonus
Shares") upon the achievement of certain milestones, each of which the Company has determined not to be probable. The additional
 10 % is based on the fully diluted capital stock of Cornerstone, at the time of issuance. If any of the milestones are met, the Bonus
Shares are to be issued without any additional payment.

 Prior to the Cornerstone Restructuring described
in Note 6, the Company indirectly owned 51 % of the issued and outstanding equity in Cornerstone and had certain governance rights, with
approximately 8 % of the issued and outstanding equity owned by the Company's subsidiary CS Pharma and 43 % owned by the Company's
subsidiary Pharma Holdings.

 Prior to the Cornerstone Restructuring, the Company
had determined that Cornerstone was a VIE; however, the Company had determined that it was not the primary beneficiary as it did not
have the power to direct the activities of Cornerstone that most significantly impact Cornerstone's economic performance. In addition,
the interests held in Cornerstone were Series D Convertible Preferred Stock and did not represent in-substance common stock.

 On March 13, 2024, Cornerstone consummated a
restructuring of its outstanding debt and equity interests. See Note 6 for additional information regarding the Cornerstone Restructuring
transaction.

 NOTE 8 – INVESTMENT IN RP FINANCE, LLC

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

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

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

 Prior to the Cornerstone Restructuring and resulting
RP Finance Consolidation, the Company had determined that RP Finance was a VIE; however, the Company had determined that it was not the
primary beneficiary as the Company did not have the power to direct the activities of RP Finance that most significantly impacted RP
Finance's economic performance and, therefore, was not required to consolidate RP Finance. Therefore, the Company used the equity
method of accounting to record its investment in RP Finance.

 On March 13, 2024, Cornerstone consummated the
Cornerstone Restructuring of its outstanding debt and equity interests. As part of the Cornerstone Restructuring, Cornerstone and RP
Finance amended the RPF Line of Credit agreement. See Note 6 for additional information regarding the Cornerstone Restructuring transaction.

 NOTE 9 - CONVERTIBLE NOTES PAYABLE

 As of July 31, 2025, Cornerstone has $ 686 thousand in principal,
and $ 260 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 (ranging from February 2013 through September 2016) and automatically accelerate upon the sale of Cornerstone
in its entirety or the sale or license of substantially all of Cornerstone's assets or intellectual property. The Series C Convertible
Notes (including all accrued and unpaid interest thereon) automatically convert into the same class of securities (including stock warrants)
sold in Cornerstone's equity financing (i) where Cornerstone receives gross proceeds of at least $ 10,000,000 from Institutional
Investors (a "Qualified Financing"), or (ii) from an underwritten initial public offering ("IPO"). The conversion
price of the Series C Convertible Notes upon a Qualified Financing shall be the lesser of (i) 90 % of the price per share (or unit) at
which the securities in the Qualified Financing are sold, or (ii) $ 1.25 price per share (or unit) (whichever is less) at the holder's
selection of (i) or (ii), and 90 % of the share price per share (or unit) at which securities in an IPO are first sold.

 F- 31

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

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

 Of the Series C Convertible Notes outstanding
as of July 31, 2025:

 (a) Series C Convertible
Notes with an aggregate principal amount of $ 614 thousand remain outstanding and were not amended in connection with the Cornerstone
Restructuring. The interest accrued on these Series C Convertible Notes as of July 31, 2025 is $ 235 thousand and is recorded in
accrued expenses on the consolidated balance sheet. In the Cornerstone Acquisition, Rafael recorded these Series C Convertible Notes
as current liabilities at the value of their aggregate principal amount of $ 614 thousand, and $ 205 thousand of accrued interest thereon
recorded in accrued expenses on the consolidated balance sheet as of the date of the Cornerstone Acquisition, as these values approximate
their fair values. As of July 31, 2025, these Series C Convertible Notes are currently in default as they are beyond the maturity
date; and

 (b) Series C Convertible
Notes with an aggregate principal amount of $ 72 thousand were amended in the Cornerstone Restructuring to (i) extend the maturity date
thereof to May 31, 2028 and (ii) provide that, on conversion thereof, the converting holder will receive shares of Cornerstone Common
Stock. The holders of these amended Series C Convertible Notes that remain outstanding waived such holders' rights in connection
with the Cornerstone Restructuring. The interest accrued on these Series C Convertible Notes as of July 31, 2025 is $ 25 thousand.
In the Cornerstone Acquisition, Rafael recorded these Series C Convertible Notes as noncurrent liabilities at their fair value of $ 70
thousand, which considers the aggregate principal plus accrued interest. The Company will accrete the fair value of these Series C Convertible
Notes to the value of the principal plus accrued interest thereon as of the date of the Cornerstone Acquisition as interest expense in
the consolidated statements of operations and comprehensive loss over the estimated term of these amended Series C Convertible Notes.

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

 During the year ended July 31, 2024, the Company
recorded $ 9 thousand of interest expense in relation to the Cornerstone Series C Convertible Notes, to interest expense on the consolidated

 F- 32

 NOTE 10 - ACCRUED EXPENSES

 Accrued expenses consist of the following:

 2025

 2024

 Accrued expenses, current

 Accrued severance expenses

 $
 1,179

 $
 —

 Accrued bonuses

 Accrued professional fees

 Accrued payroll expenses

 —

 Accrued interest

 Accrued clinical trial expense

 —

 Other accrued expenses

 Total accrued expenses, current

 3,304

 1,798

 Creditor payable, noncurrent

 3,602

 2,982

 Accrued severance, noncurrent

 —

 Total accrued expenses, noncurrent

 3,895

 2,982

 Total accrued expenses

 $
 7,199

 $
 4,780

 Creditor Payable

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

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

 As part of the Cornerstone Acquisition, the creditor
payable was recognized by the Company as an assumed liability and measured at its fair value of $ 2.7 million as of the date of the Cornerstone
Acquisition. The Company will accrete the fair value of the creditor payable to the amount payable of $ 8.5 million owed to the Creditor
as interest expense in the consolidated statements of operations and comprehensive loss over the estimated term of the forbearance agreement
through July 31, 2033. The Company recorded $ 237 thousand of accretion in relation to the creditor payable recorded to interest expense
in the consolidated statements of operations and comprehensive loss for the year ended July 31, 2024. The Company recorded $ 617 thousand
of accretion in relation to the creditor payable recorded to interest expense in the consolidated statements of operations and comprehensive
loss for the year ended July 31, 2025.

 The carrying value of the creditor payable was
$ 3.6 million and $ 3.0 million as of July 31, 2025 and July 31, 2024, respectively, and is included in accrued expenses, noncurrent
on the consolidated balance sheets.

 F- 33

 NOTE 11 – CONVERTIBLE NOTES RECEIVABLE

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

 In March 2025, Day Three Labs Manufacturing received
a convertible promissory note with a principal amount of $ 500 thousand from SoRSE Technology Corporation ("SoRSE"), a Delaware
corporation, as part of the DTLM Sale Transactions, as defined in Note 13. The note bears interest at an annual rate of 4 %, commencing
on the 91st day following the issuance date. The outstanding principal and accrued interest due under the note will automatically convert
into shares of common stock of SoRSE upon the occurrence of a qualified sale or financing transaction, as defined in the note. If the
note has not been fully converted prior to its September 2026 maturity date, Day Three Labs Manufacturing may convert all or any portion
of the outstanding principal and accrued interest into the most senior class or series of capital stock of SoRSE.

 The Company's convertible notes receivable
are classified as available-for-sale and recorded at fair value (see Note 15).

 NOTE 12 – INVESTMENT IN LIPOMEDIX PHARMACEUTICALS LTD.

 LipoMedix is a development-stage, privately held
Israeli company focused on the development of an innovative, safe and effective cancer therapy based on liposome delivery.

 In March 2021, the Company provided bridge financing
in the principal amount of up to $ 400 thousand to LipoMedix with a maturity date of September 1, 2021, and an interest rate of 8 % per
annum. As of September 1, 2021, LipoMedix was in default on the terms of the loan and as such, the interest rate has increased to 15 %
per annum.

 On November 15, 2021, the Company entered into
a share purchase agreement with LipoMedix to purchase up to 15,975,000 ordinary shares at $ 0.1878 per share for an aggregate purchase
price of $ 3.0 million (the "LipoMedix SPA"). Additionally, LipoMedix issued the Company a warrant to purchase up to 15,975,000
ordinary shares at an exercise price of $ 0.1878 per share which expired on November 11, 2022.

 As of the date of the LipoMedix SPA, there was
an outstanding loan balance including principal of $ 400 thousand and accrued interest of $ 21.8 thousand owed by LipoMedix to the Company
on a note made by LipoMedix in favor of the Company issued in March 2021. The amount due on the loan was netted against the approximately
$ 3.0 million aggregate purchase price due to LipoMedix, resulting in a cash payment by the Company of approximately $ 2.6 million in exchange
for the 15,975,000 shares purchased. As a result of the share purchase, the Company's ownership of LipoMedix increased to approximately
 84 % with a noncontrolling interest of approximately 16 %. The Company recorded approximately $ 8 thousand to adjust the carrying amount
of the noncontrolling interest to reflect the Company's increased ownership interest in LipoMedix's net assets.

 On February 9, 2023, the Company entered into
a Share Purchase Agreement with LipoMedix to purchase 70,000,000 ordinary shares at $ 0.03 per share for an aggregate purchase price of
$ 2.1 million (the "2023 LipoMedix SPA"). As a result of the share purchase, the Company's ownership of LipoMedix increased
to approximately 95 % with a noncontrolling interest of approximately 5 %. The Company recorded approximately $ 16 thousand to adjust the
carrying amount of the noncontrolling interest to reflect the Company's increased ownership interest in LipoMedix's net assets.

 NOTE 13 – INVESTMENT IN DAY THREE LABS INC.

 Initial investment in Day Three

 On April 7, 2023, the Company entered into a
Common Stock Purchase Agreement (the "Day Three Purchase Agreement") with Day Three. Day Three is a company which reimagines
existing cannabis offerings with technology and innovation like Unlokt to bring to market better, cleaner, more precise and predictable
products. Pursuant to the Day Three Purchase Agreement, the Company purchased 4,302 shares of common stock, post DTL Reverse Stock Split
(as defined below), representing 38 % of the outstanding shares of common stock of Day Three ( 33 % on a fully diluted basis), for a purchase
price of $ 3.0 million. The Company also received a warrant exercisable for 7,529 shares of common stock, post DTL Reverse Stock Split,
which expires five years from the date of issuance or earlier based on the occurrence of certain events as defined in the Day Three Purchase
Agreement (the "Day Three Warrant").

 F- 34

 Prior to January 2024, the Company accounted
for this investment as an equity method investment in accordance with the guidance in ASC 323, Investments – Equity Method and
Joint Ventures. The Company determined that a 38 % ownership interest in Day Three and its right to designate two members of the Board
of Directors of Day Three (out of a current total of seven members) indicates that the Company is able to exercise significant influence.

 The Company determined that Day Three is a VIE;
however, the Company determined that, prior to January 2024, it was not the primary beneficiary as it did not have the power to direct
the activities that most significantly impacted Day Three's economic performance. The Company has therefore concluded it was not
required to consolidate Day Three. The Company used the equity method of accounting to record its investment in Day Three.

 Day Three's fiscal year ends on December
31 and, as a result, the Company recognized its share of Day Three's earnings/loss on a one-month lag. For the year ended July
31, 2024, the Company recognized approximately $ 422 thousand of equity in loss of Day Three, based on its proportionate share of Day
Three's results through January 2, 2024, the effective date of the Day Three Acquisition. The assets and operations of Day Three
are not significant to the Company's assets or operations.

 Acquisition of Day Three

 In January 2024, the Company entered into a series
of transactions with Day Three and certain shareholders to purchase an aggregate of 13,771 shares of common stock, post DTL Reverse Stock
Split, of Day Three, acquiring a controlling interest of Day Three (the "Day Three Acquisition"). Day Three has options and
warrants outstanding that, if and when exercised, could dilute the Company's ownership interest in Day Three. In connection with
the Day Three Acquisition, the Day Three Warrant was terminated. The acquisition date was determined to be January 2, 2024, which is
the date that Rafael obtained a controlling interest of the common stock of Day Three. The Day Three Acquisition is being accounted for
as a business combination in accordance with ASC 805.

 During the period of October 2023 through January
2024, the Company advanced $ 250 thousand to Day Three pursuant to a promissory note (the "Day Three Note I"), $ 150 thousand
to Day Three pursuant to a promissory note (the "Day Three Note II"), $ 1.0 million to Day Three pursuant to a third promissory
note (the "Day Three Note III"), and approximately $ 589 thousand to Day Three pursuant to a fourth promissory note (the "Day
Three Note IV") (collectively, the "Day Three Promissory Notes"). The Day Three Promissory Notes accrue interest at
rates of between 5.01 % and 5.19 % per annum.

 The aggregate consideration of the Day Three
Acquisition was $ 3.1 million, which consisted of 1) cash consideration of $ 0.2 million, 2) accrued consideration of $ 0.2 million, 3)
the exchange of principal and accrued interest amounts totaling to $ 2.0 million owed by Day Three to the Company pursuant to the Day
Three Promissory Notes for common stock, and 4) the fair value of previously held interests in Day Three of $ 0.7 million.

 The following table summarizes the purchase consideration
transferred in the Day Three Acquisition as defined in ASC 805:

 Purchase Consideration

 Cash consideration

 $

 Accrued consideration

 Exchange of Day Three Promissory Notes for Common Stock

 2,000

 Fair value of previously held interests (1)

 Total purchase consideration

 $
 3,142

 (1)
 The Company remeasured its previously held equity interest in Day Three immediately before the Day Three Acquisition, previously accounted for under the equity method of accounting, to its fair value (determined using the implied enterprise value based on the purchase price multiplied by the ratio of the number of shares previously held to total shares, as of the acquisition date) and recognized a loss of $ 1.6 million recorded on the consolidated statements of operations and comprehensive loss as a loss on initial investment in Day Three upon acquisition during the quarter ended January 31, 2024.

 F- 35

 The following table summarizes the fair values
of the assets acquired and liabilities assumed in the Day Three Acquisition as of the acquisition date:

 January 2, 2024

 Cash and cash equivalents

 $
 1,499

 Accounts receivable

 Property and equipment

 3,050

 Identifiable intangible assets

 2,180

 Accounts payable

 ( 386
)

 Accrued expenses

 ( 98
)

 Installment note payable

 ( 2,500
)

 Total fair value of net assets acquired

 4,293

 Less: noncontrolling interest

 ( 1,151
)

 Net assets acquired attributable to Rafael

 $
 3,142

 During the year ended July 31, 2024, the Company
recognized an adjustment which changed the fair value of certain acquired liabilities and goodwill as a result of obtaining additional
information about the estimated liabilities.

 The noncontrolling interest was recognized at
fair value, which was determined using the implied enterprise value based on the purchase price multiplied by the ratio of the number
of shares owned by minority holders to total shares, as of the acquisition date.

 Intangible assets acquired primarily include
patents, technology licenses and non-compete agreements. The weighted average amortization period for the acquired intangible assets
is approximately 14.7 years.

 On January 23, 2024, Day Three entered into an
asset purchase agreement for the sale of certain patents for $ 280 thousand.

 Included in the acquired liabilities assumed
in the Day Three Acquisition is a non-interest bearing installment note payable of $ 2.5 million (the "DTLM Note Payable").
The installment note was recognized by Day Three in relation to a 2021 asset purchase agreement for certain patents related to extraction
technology which are used in Day Three Lab Manufacturing's Infusion Technology services. The assumed installment note payable had
a balance of $ 800 thousand due January 2024 (which was paid in January 2024) and the remaining $ 1.7 million due in November 2024. The
DTLM Note Payable was fully settled as part of the DTLM Sale Transaction (defined below).

 On March 20, 2024, Day Three amended and restated
its certificate of incorporation to, among other things, effect a one-for-one-thousand reverse split of all of Day Three's common
stock (the "DTL Reverse Stock Split").

 On May 1, 2024, Rafael entered into a stock purchase
agreement with Day Three to purchase 7,194 shares of common stock at a purchase price of $ 173.75 per share for an aggregate purchase
price of $ 1.25 million, $ 1 million of which was funded through the relief of an existing intercompany receivable. As a result of the
transaction, and as of July 31, 2025, Rafael has an 84 % ownership interest in Day Three.

a layoff, the Company concluded that in accordance with ASC 350 and ASC 360, a triggering event occurred during November 2024, which
required the Company to assess if goodwill or long-lived assets were impaired.

 In accordance with ASC 360, the Company completed
an analysis and determined that the expected undiscounted cash flows of the long-lived asset group exceeded its carrying amount, indicating
that the long-lived assets were not impaired.

 F- 36

 In accordance with ASC 350, the Company performed
a quantitative goodwill impairment test, which indicated that the carrying amount of the reporting unit exceeded the estimated fair value
of the reporting unit, indicating that the goodwill of the reporting unit was impaired. The Company recorded an impairment charge of
$ 3.1 million related to goodwill during the year ended July 31, 2025. See Note 18 for more information.

 In March 2025, Day Three Labs Manufacturing entered
into a series of transactions (the "DTLM Sale Transactions") with SoRSE and the holder of the DTLM Note Payable pursuant
to which they sold certain assets in exchange for a $ 500 thousand non-interest bearing convertible promissory note (see Note 11) and
were relieved of the liability under the DTLM Note Payable in exchange for shares of Day Three Labs Manufacturing common stock. As a
result of the DTLM Sale Transactions, which were contemplated and accounted for as a single transaction, the holder of the DTLM Note
Payable owns 20 % of the outstanding shares of Day Three Labs Manufacturing. Pursuant to the DTLM Sale Transactions, Day Three Labs Manufacturing
also licensed specific applications of their Unlokt technology patents to SoRSE, effective through the patents' expiration.
The Company recognized a gain of $ 30 thousand as a result of the DTLM Sale Transactions which is included in other income, net on the
consolidated statements of operations and comprehensive loss during the year ended July 31, 2025.

 NOTE 14 – INVESTMENTS IN MARKETABLE
SECURITIES

 The Company has classified its investments in
corporate bonds, U.S. agency bonds, and U.S. treasury bills as available-for-sale securities. These securities are carried at estimated
fair value with unrealized holding gains and losses included in accumulated other comprehensive loss in stockholders' equity until
realized. Investment transactions are recorded on their trade date. Gains and losses on marketable security transactions are reported
on the specific-identification method. Interest income is accrued daily and adjusted for amortization of premiums and accretion of discounts
on the corporate bonds, U.S. agency bonds, and U.S. treasury bills.

 On November 19, 2024, the Company sold its investments
in available-for-sale securities and cash equivalents for cash proceeds totaling $ 52.9 million. The sale resulted in a net loss of approximately
$ 16 thousand, which is recognized in the consolidated financial statements during the year ended July 31, 2025. The transaction was executed
to reallocate assets to better align with the Company's strategic goals.

 The amortized cost, gross unrealized holding
gains, gross unrealized holding losses, and fair value for available-for-sale securities as of July 31, 2024 are as follows:

 July 31, 2024

 Amortized cost

 Gross unrealized gains

 Gross unrealized (losses)

 Fair value

 Available-for-sale securities:

 U.S. Treasury Bills

 $
 3,969

 $
 —

 $
 ( 2
)

 $
 3,967

 U.S. Agency

 4,079

 —

 ( 3
)

 4,076

 Corporate bonds

 55,252

 ( 32
)

 55,222

 Total available-for-sale securities

 $
 63,300

 $

 $
 ( 37
)

 $
 63,265

 During the year ended July 31, 2025, the Company
reclassified $ 178 thousand of unrealized gains, related to the sale of available-for-sale securities, out of accumulated other comprehensive
income and into realized gain on available-for-sale securities. During the year ended July 31, 2024, the Company reclassified approximately
$ 1.8 million of unrealized gains, related to the sale of available-for-sale securities, out of accumulated other comprehensive loss and
into realized gain on available-for-sale securities.

 Marketable securities in an unrealized loss position
as of July 31, 2024 were not deemed impaired at acquisition. Effective August 1, 2023, the Company evaluates subsequent unrealized
losses to determine whether the decline in fair value has resulted from credit losses or other factors. No such credit losses have been
identified during the year ended July 31, 2025 or 2024.

 F- 37

 NOTE 15 – 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 Company's assets required to be measured
at fair value on a recurring basis and where they are classified within the fair value hierarchy as of July 31, 2025 and July 31,
2024 are as follows:

 July 31, 2025

 Level 1

 Level 2

 Level 3

 Total

 Assets:

 Convertible notes receivable classified as available-for-sale

 $
 —

 $
 —

 $
 1,858

 $
 1,858

 Total

 $
 —

 $
 —

 $
 1,858

 $
 1,858

 July 31, 2024

 Level 1

 Level 2

 Level 3

 Total

 Assets:

 Available-for-sale securities - Corporate and U.S. Agency Bonds

 $
 —

 $
 59,298

 $
 —

 $
 59,298

 Available-for-sale securities - U.S. Treasury Bills

 3,967

 —

 —

 3,967

 Investment in Cyclo - Common Stock

 10,746

 —

 —

 10,746

 Convertible notes receivable, due from Cyclo

 —

 —

 5,191

 5,191

 Investment in Cyclo - Warrants

 —

 —

 1,264

 1,264

 Hedge funds

 —

 —

 2,547

 2,547

 Convertible notes receivable classified as available-for-sale

 —

 —

 1,146

 1,146

 Total

 $
 14,713

 $
 59,298

 $
 10,148

 $
 84,159

 As of July 31, 2025 and July 31, 2024,
the Company did not have any liabilities measured at fair value on a recurring basis.

 F- 38

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

 2025

 2024

 Balance, beginning of period

 $
 10,148

 $
 6,905

 Withdrawal from Hedge Fund Investments

 ( 2,547
)

 ( 2,500
)

 Unrealized gain on Hedge Fund

 —

 Investment in Cyclo Warrants

 —

 1,338

 Unrealized loss on Cyclo Warrants

 ( 1,264
)

 ( 74
)

 Funding of Cyclo Convertible Notes

 19,500

 4,000

 Unrealized gain on issuance of Cyclo Convertible Notes

 —

 1,313

 Change in fair value of Cyclo Convertible Notes

 ( 719
)

 ( 122
)

 Conversion of Cyclo Convertible Note

 ( 2,500
)

 —

 Forgiveness of Cyclo Convertible Notes in the Cyclo Merger

 ( 21,472
)

 —

 Unrealized gain on Convertible note receivable, related party

 —

 Realized gain on convertible note receivable, related
 party released from accumulated other

 comprehensive income

 —

 ( 663
)

 Conversion of convertible note receivable, related party

 —

 ( 2,000
)

 Unrealized gain on convertible note receivable

 —

 —

 Issuance of new convertible notes receivable

 1,000

 Change in fair value of convertible notes receivable classified as available-for
 sale

 Balance, end of period

 $
 1,858

 $
 10,148

 Hedge funds classified as Level 3 include investments
and securities which may not be based on readily observable data inputs. The availability of observable inputs can vary from security
to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and
not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. The fair value
of these assets is estimated based on information provided by the fund managers or the general partners. Therefore, these assets are
classified as Level 3. During the year ended July 31, 2025, the Company withdrew its remaining balance in Hedge Fund Investments and
recognized a realized loss of $ 2 thousand upon the withdrawal's approval.

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

 Fair Value of Other Financial Instruments

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

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

 F- 39

 NOTE 16 – ACCOUNTS RECEIVABLE

 Accounts receivable consisted of the following:

 2025

 2024

 Accounts receivable - third party

 $

 $

 Accounts receivable - related party

 Less allowance for credit losses

 ( 245
)

 ( 245
)

 Accounts receivable, net

 $

 $

 NOTE 17 – PROPERTY AND EQUIPMENT

 Property and equipment consisted of the following:

 2025

 2024

 Building and improvements

 $
 2,505

 $
 2,505

 Machinery and equipment

 Other

 2,608

 3,138

 Less accumulated depreciation and amortization

 ( 1,012
)

 ( 1,018
)

 Total

 $
 1,596

 $
 2,120

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

 Depreciation expense and amortization expense
pertaining to property and equipment was approximately $ 146 thousand and $ 137 thousand for the years ended July 31, 2025 and 2024, respectively.

 NOTE 18 - 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 November 2024, the Company identified
a triggering event that required an impairment test for its long-lived assets and goodwill balances within its Infusion Technology reporting
unit in accordance with ASC 360 and ASC 350, respectively. The triggering event was identified due to reductions in certain operations
including a layoff within the Company's Infusion Technology segment. The Company performed an interim impairment analysis of the
Infusion Technology reporting unit as of November 30, 2024.

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

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

 F- 40

 The following is a summary of goodwill by reportable segment as of
and for the years ended July 31, 2025 and 2024:

 Healthcare

 Consolidated

 Balance as of July 31, 2023

 $
 —

 $
 —

 $
 —

 $
 —

 Day Three Acquisition

 —

 —

 3,050

 3,050

 Balance as of July 31, 2024

 —

 —

 3,050

 3,050

 Impairment charge

 —

 —

 ( 3,050
)

 ( 3,050
)

 Cyclo Merger

 —

 —

 Balance as of July 31, 2025

 $

 $
 —

 $
 —

 $

 IPR&D

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

 The following is a summary of in-process research
and development for the years ended July 31, 2025 and 2024:

 Balance as of July 31, 2023

 $
 1,575

 Balance as of July 31, 2024

 1,575

 Acquired in-process research & development due to
 Cyclo Merger

 30,000

 Balance as of July 31, 2025

 $
 31,575

 Intangible assets

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

 Weighted average remaining useful life (years)

 Gross Carrying Amount

 Accumulated Amortization

 Net Carrying Amount

 Customer Relationships

 $
 1,040

 $
 ( 46
)

 $

 Total Intangible Assets

 $
 1,040

 $
 ( 46
)

 $

 The following is a summary of intangible assets
at July 31, 2024:

 Weighted average remaining useful life (years)

 Gross Carrying Amount

 Accumulated Amortization

 Net Carrying Amount

 Intellectual Property

 $
 1,885

 $
 ( 73
)

 $
 1,812

 Non-compete Agreements

 ( 15
)

 Total Intangible Assets

 $
 1,935

 $
 ( 88
)

 $
 1,847

 F- 41

 As part of the DTLM Sale Transactions in March
2025, Day Three Labs Manufacturing sold all non-compete agreements and licensed specific applications of their Unlokt technology
patents to SoRSE, effective through the patents' expiration. See Note 13 for more information.

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

 Year Ending July 31,

 2026

 $

 2027

 2028

 2029

 2030

 Thereafter

 Total

 $

 Amortization of intangible assets totaled $ 142
thousand and $ 88 thousand for the years ended July 31, 2025 and 2024, respectively, and is included in depreciation and amortization
expense within the consolidated statements of operations and comprehensive loss.

 NOTE 19 – LOSS PER SHARE

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

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

 Year Ended

 2025

 2024

 Shares issuable upon exercise of stock options

 2,270,812

 638,409

 Shares issuable upon vesting of restricted stock

 416,720

 608,540

 Shares issuable upon exercise of warrants

 1,058,902

 —

 3,746,434

 1,246,949

 The diluted loss per share computation equals
basic loss per share for the years ended July 31, 2025 and 2024, because the Company had a net loss in all such periods and the impact
of the assumed vesting of restricted shares, exercise of stock options, and exercise of warrants would have been anti-dilutive.

 F- 42

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

 Year Ended

 2025

 2024

 Numerator:

 Net loss

 $
)

 $
)

 Net loss attributable to noncontrolling interests

 ( 123
)

 ( 30,593
)

 Net loss attributable to Rafael Holdings, Inc.

 $
 ( 30,520
)

 $
 ( 34,410
)

 Denominator:

 Weighted average diluted shares

 29,422,221

 23,745,516

 Loss per share attributable to common stockholders

 Basic and diluted:

 $
 ( 1.04
)

 $
 ( 1.45
)

 NOTE 20 – RELATED PARTY TRANSACTIONS

 IDT Corporation

 IDT Corporation ("IDT"), a related
party through common ownership and some common members of management, has historically maintained a due to/from balance that relates
to cash advances for investments, loan repayments, charges for services provided to the Company by IDT and payroll costs for the Company's
personnel that were paid by IDT as the relevant persons were also providing services to IDT. IDT billed the Company approximately $ 275
thousand and $ 296 thousand for services during years ended July 31, 2025 and 2024, respectively. The Company had balances due to IDT
of $ 59 thousand at both July 31, 2025 and July 31, 2024, included in due to related parties.

 IDT currently leases approximately 3,600 square
feet of office space and parking space in our real estate asset. The Company invoiced IDT approximately $ 140 thousand and $ 108 thousand
for the years ended July 31, 2025 and 2024, respectively. As of July 31, 2025 and July 31, 2024, IDT owed the Company approximately
$ 93 thousand and $ 332 thousand, respectively, for office rent and parking plus Israeli value added tax.

 Related Party Rental Income

 The Company leased space to related parties (including
IDT Corporation – see above) which represented approximately 12 % and 17 % of the Company's total revenue for the years
ended July 31, 2025 and 2024, respectively.

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

 On July 31, 2023, eight trusts, each for the
benefit of a child of Howard S. Jonas, the Company's Executive Chairman and Chairman of the Board, with independent trustees, transferred
an aggregate of 787,163 shares of Class A common stock of the Company (representing all of the issued and outstanding shares of the Class
A common stock of the Company, and 51.3 % of the aggregate voting power of all issued and outstanding shares of capital stock of the Company)
to a limited partnership. Howard Jonas is the sole manager of the sole general partner of the limited partnership and, therefore, has
sole voting and dispositive power over the shares of Class A common stock held by the limited partnership. Following the transfer, Mr.
Jonas is the controlling stockholder of the Company and the Company is a controlled company as defined in Section 303A of the New York
Stock Exchange Listed Company Manual.

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

 F- 43

 Following the expiration of the Rights Offering
on June 4, 2025, Howard S. Jonas and certain related parties purchased 16,386,020 shares of Class B common stock in a private placement
for approximately $ 21.0 million, representing the unsubscribed portion of the offering. No fees were paid to Mr. Jonas for his commitment.
As of July 31, 2025, Mr. Jonas has voting power over 787,163 shares of Class A common stock (which are convertible into shares of Class
B common stock on a 1-for-1 basis) and 14,020,427 shares of Class B common stock, approximately 28 % of the Company's Class B Common
Stock, representing approximately 51 % of the combined voting power of the Company's outstanding capital stock.

 Other Related Parties

 During the year ended July 31, 2025, the Company
paid Sam Beyda, who previously served as the Chief Executive Officer and a Director of Day Three and who is Howard Jonas' son-in-law,
wages of wages of $ 142 thousand plus a bonus of $ 33 thousand.

 NOTE 21 – INCOME TAXES

 The components of loss before income taxes, including
equity in loss of Day Three, are as follows:

 For the Years Ended

 2025

 2024

 Domestic

 $
 ( 32,338
)

 $
 ( 67,653
)

 ( 858
)

 ( 30
)

 Loss before income taxes

 $
 ( 33,196
)

 $
 ( 67,683
)

 Benefit from income taxes consisted of the following:

 For the Years Ended

 2025

 2024

 Current:

 $
 —

 $

 Federal

 —

 —

 State

 ( 2,388
)

 ( 2,602
)

 Total current benefit

 ( 2,388
)

 ( 2,583
)

 Deferred:

 —

 ( 73
)

 Federal

 ( 160
)

 ( 17
)

 State

 ( 5
)

 ( 7
)

 Total deferred benefit

 ( 165
)

 ( 97
)

 Benefit from income taxes

 $
 ( 2,553
)

 $
 ( 2,680
)

 F- 44

 The reconciliation between the Company's
effective tax rate on loss before income taxes and the statutory tax rate for the years ended July 31, 2025 and July 31, 2024
is as follows:

 For the Years Ended

 2025

 2024

 U.S. federal income tax at statutory rate

 $
 ( 6,972
)

 $
 ( 14,213
)

 Permanent items - Cornerstone Acquisition

 —

 18,871

 Nondeductible items

 1,360

 State income tax

 ( 1,739
)

 1,807

 Rate change

 —

 Foreign operations

 ( 34
)

 ( 1
)

 True up and other

 ( 1,043
)

 Cornerstone Acquisition impact to deferred tax assets

 —

 ( 51,546
)

 Derecognition of Cornerstone investment due to Cornerstone Acquisition

 —

 23,312

 Sales of state NOLs

 ( 2,429
)

 ( 2,613
)

 Orphan Drug Credits

 ( 1,045
)

 —

 Change in valuation allowance

 9,209

 20,404

 Benefit from income taxes

 $
 ( 2,553
)

 $
 ( 2,680
)

 In accordance with the State of New Jersey's
Technology Business Tax Certificate Transfer Program, which allowed certain high technology and biotechnology companies to sell unused
net operating loss carryforwards ("NOLs") to other New Jersey-based corporate taxpayers, the Company received approximately
$ 2.4 million for the sale of the Company's prior period NOLs totaling $ 28.6 million which was recorded in the benefit from income
taxes in the consolidated statements of operations and comprehensive loss for the year ended July 31, 2025. The Company received approximately
$ 2.6 million for the sale of the Company's prior period NOLs totaling $ 31.6 million in the third quarter of fiscal 2024 which was
recorded in the benefit from income taxes in the consolidated statements of operations and comprehensive loss for the year ended July
31, 2024.

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

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

 At July 31,

 2025

 2024

 Deferred tax assets:

 Net operating loss carryforwards

 $
 85,847

 $
 61,204

 Federal tax credits, net of uncertain tax position

 16,910

 6,145

 Capitalized Sec. 174 research and experimental expenditures

 29,117

 3,121

 Stock-based compensation

 2,354

 2,486

 Depreciation

 Reserves and accruals

 Charitable contributions

 Related party interest

 —

 Disallowed interest expense

 1,008

 —

 Gross deferred tax assets

 137,422

 73,632

 Less valuation allowance

 ( 128,403
)

 ( 71,275
)

 Total deferred tax assets, net of valuation allowance

 9,019

 2,357

 Deferred tax liabilities:

 Unrealized gain

 ( 199
)

 ( 2,327
)

 Intangible assets

 ( 8,958
)

 ( 30
)

 Total deferred tax liabilities:

 ( 9,157
)

 ( 2,357
)

 Deferred tax liability, net

 $
 ( 138
)

 $
 —

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

 F- 45

 Deferred tax assets established for the excess
outside tax basis of an investee are derecognized upon the event that the investee becomes a domestic subsidiary as a result of a business
combination or consolidation, as it is likely that the deferred tax asset will no longer quality for recognition. During the year ended
July 31, 2025, the Company derecognized unrealized loss deferred tax assets related to prior investments in Cyclo as a result of the
Cyclo Acquisition. During the year ended July 31, 2024, the Company derecognized unrealized loss deferred tax assets related to prior
investments in Cornerstone and Day Three as a result of the Cornerstone Acquisition and Day Three Acquisition, respectively.

 As of July 31, 2025, based on the Company's
history of losses and its assessment of future losses, management believes that it is more likely than not that future taxable income
will not be sufficient to realize all of the Company's deferred tax assets. Therefore, a valuation allowance has been applied to
deferred tax assets.

 Effective for tax years beginning after December
31, 2021, taxpayers are required to capitalize any expenses incurred that are considered incidental to research and experimentation ("R&E")
activities under IRC Section 174. While taxpayers historically had the option of deducting these expenses under IRC Section 174, the
December 2017 Tax Cuts and Jobs Act mandates capitalization and amortization of R&E expenses for tax years beginning after December
31, 2021. Expenses incurred in connection with R&E activities in the U.S. must be amortized over a 5 -year period and R&E expenses
incurred outside the U.S. must be amortized over a 15 -year period. R&E activities are broader in scope than qualified research activities
that are considered under IRC Section 41 (relating to the research tax credit).

 As of July 31, 2025, the Company has federal, state, and foreign net operating loss carryforwards of approximately $ 366.3 million, $ 107.3
million and $ 11.6 million, respectively. The Company acquired federal and state net operating loss carryforwards of approximately $ 87.1
million and $ 74.8 million, respectively in connection with the Merger with Cyclo in March 2025. Federal net operating loss carryforwards
in the amount of $ 100.9 million begin expiring in 2026 and approximately $ 265.4 million have an indefinite life. Federal NOL carryforwards
generated after tax year 2021 are subject to an 80 % limitation on taxable income, do not expire and will carryforward indefinitely. State
net operating loss carryforwards in the amount of $ 107.3 million begin expiring in fiscal 2026. Foreign net operating loss carryforwards
in the amount of $ 11.6 million have an indefinite life.

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

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

 In July 2025, the "One Big Beautiful
Bill Act" ("OBBBA") was enacted into law as Public Law 119-21. This legislation introduced sweeping changes to the
U.S. tax code, including the permanent extension of 100 % bonus depreciation for qualified property and the codification of full
expensing for certain research and development (R&D) expenditures under Section 174. The Company has elected not to claim bonus
depreciation on qualified property placed in service during the current fiscal year. With respect to Section 174, the Company has
not adopted immediate expensing of qualified U.S. R&D expenses and is currently evaluating whether to expense the qualified
U.S. R&D capitalized costs in the next year or over 2 years.

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

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

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

 F- 46

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

 At July 31,

 2025

 2024

 Balance, beginning of the year

 $
 6,218

 $
 —

 Additions of tax positions related to the current year

 1,045

 —

 Additions of tax positions related to the current year – Cyclo Acquisition

 9,720

 —

 Additions of tax positions related to the prior year

 —

 6,218

 Balance, end of year

 $
 16,983

 $
 6,218

 NOTE 22 – BUSINESS SEGMENT INFORMATION

 The Company conducts business as three operating
segments, Healthcare, Infusion Technology and Real Estate. The Company's 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
Company's Chief Financial Officer who is the chief operating decision-maker ("CODM").

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

 The Healthcare segment is comprised of a majority
equity interest in LipoMedix, Barer, Cornerstone, Cyclo, and Rafael Medical Devices. Following the Cyclo Merger, the Healthcare segment
generated $ 515 thousand of product revenue during the year ended July 31, 2025.

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

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

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

 Healthcare

 Total

 Year Ended July 31, 2025

 Infusion technology revenue

 $
 —

 $

 $
 —

 $

 Rental – Third Party

 —

 —

 Rental – Related Party

 —

 —

 Product revenue

 —

 —

 COSTS AND EXPENSES

 Cost of Infusion Technology revenue

 —

 ( 106
)

 —

 ( 106
)

 Cost of product revenue

 ( 28
)

 —

 —

 ( 28
)

 ( 13,165
)

 ( 320
)

 ( 296
)

 ( 13,781
)

 ( 12,568
)

 ( 255
)

 —

 ( 12,823
)

 ( 48
)

 ( 177
)

 ( 63
)

 ( 288
)

 Loss on impairment of goodwill

 —

 ( 3,050
)

 —

 ( 3,050
)

 $
 ( 25,294
)

 $
 ( 3,815
)

 $
 ( 50
)

 $
 ( 29,159
)

 F- 47

 Healthcare

 Total

 Year Ended July 31, 2024

 Infusion technology revenue

 $
 —

 $

 $
 —

 $

 Rental – Third Party

 —

 —

 Rental – Related Party

 —

 —

 COSTS AND EXPENSES

 Cost of Infusion Technology revenue

 —

 ( 154
)

 —

 ( 154
)

 ( 8,338
)

 ( 374
)

 ( 142
)

 ( 8,854
)

 ( 3,668
)

 ( 502
)

 —

 ( 4,170
)

 In-process research and development

 ( 89,861
)

 —

 —

 ( 89,861
)

 ( 165
)

 —

 ( 60
)

 ( 225
)

 (Loss) income from operations

 $
 ( 102,032
)

 $
 ( 675
)

 $

 $
 ( 102,627
)

 A reconciliation between loss from operations
by reportable segment to consolidated net loss before income taxes for the years ended July 31, 2025 and 2024, is as follows:

 2025

 2024

 (Loss) income from operations by segment

 Healthcare

 $
 ( 25,294
)

 $
 ( 102,032
)

 ( 3,815
)

 ( 675
)

 ( 50
)

 Total

 ( 29,159
)

 ( 102,627
)

 Reconciliation to loss before income taxes:

 Interest income

 1,996

 2,383

 Loss on initial investment in Day Three upon acquisition

 —

 ( 1,633
)

 Realized gain on available-for-sale securities

 1,772

 Realized loss on investment in equity securities

 —

 ( 46
)

 Realized gain on investment - Cyclo

 —

 Unrealized (loss) gain on investment - Cyclo

 ( 5,144
)

 Unrealized (loss) gain on convertible notes receivable, due from Cyclo

 ( 719
)

 1,191

 Unrealized gain on investment - Hedge Funds

 —

 Recovery of receivables from Cornerstone

 —

 31,305

 Interest expense

 ( 658
)

 ( 248
)

 Other income, net

 Loss before income taxes

 $
 ( 33,196
)

 $
 ( 67,261
)

 Geographic Information

 Healthcare Segment

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

 Infusion Technology Segment

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

 Real Estate Segment

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

 F- 48

 Assets

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

 United States

 Israel

 Total

 July 31, 2025

 Property, plant and equipment, net

 $

 $
 1,275

 $
 1,596

 Total assets

 111,954

 2,155

 114,109

 July 31, 2024

 Property, plant and equipment, net

 $

 $
 1,337

 $
 2,120

 Total assets

 93,434

 3,398

 96,832

 NOTE 23 – 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 Company's results of operations, cash flows
or financial condition.

 License Agreements

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

 One worldwide license agreement requires Cornerstone
to reimburse the other party for costs associated with filing and defending various patents worldwide. Payment obligations under this
license agreement remain in effect until the last underlying patents granted under the license agreement expire in their respective countries.
The last patent expired in 2019. License maintenance fees are currently $ 20,000 per year and continue for the term of the agreement,
which expires in 2026. The license maintenance fees are replaced by minimum royalties of $ 10,000 during the first year following governmental
approval to market products and escalates to $ 1,000,000 during the term of the agreement. Cornerstone is also responsible to pay fees
on any sub-licensing of the licensed patents. Cornerstone may credit each annual license maintenance fee in full against all royalties
and sublicensing fees due during the same calendar year. Cornerstone may terminate the license agreement upon 90 days' notice.
Either party may terminate the license agreement if the other party commits any material breach of any covenant or promise and does not
cure such breach within 30 days of the receipt of written notice of such material breach. In May 2017, Cornerstone renegotiated the agreement
referred to as the "second license" In exchange for a waiver of certain product development milestones, Cornerstone modified
the agreement to pay a low single digit percentage royalty for a duration of five years on Net Sales of product sold after the expiration
of the licensed patent and potentially up to eight years. As of July 31, 2025, there are no products being marketed which are covered
by the patents under the license agreement.

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

 Cornerstone's second license continues
until the termination of the later of the last to expire patent or royalty obligation under the agreement on a country-by-country basis
(currently, or as otherwise provided in the license agreement). Fifty percent of the maintenance fee payments, up to $ 1.1 million, may
be credited against the potential future royalty payments, calculated on a single digit percentage of net sales, as defined, that Cornerstone
would have to make to the license holder should royalties be paid. The agreement may be terminated on 15 days' written notice after
default by the other party if said default is not cured within 30 days of receipt of notice by the defaulting party. In addition, Cornerstone
may terminate the agreement on 15 days' written notice to the license holder. Royalties are due based on Gross Sales, as defined,
for products sold relating to patented and unpatented technology, and shall terminate on the 15 th anniversary of the first
commercial sale of the product in the corresponding country or territory. Sublicense payments are due in connection with any sublicense
fees received relating to patented and non-patented products related to the patented technology and proprietary know-how, as provided
in the agreement. As of July 31, 2025, there were no products being marketed which are covered by the patents under the license
agreement. There were no additional annual license maintenance fees required beyond 2010.

 F- 49

 As part of a royalty agreement, Cornerstone is
obligated to pay royalties, based upon percentage (low single digit) of net sales, to Altira Capital and Consulting LLC ("Altira"),
a consolidated subsidiary of the Company. The royalty obligations remain in effect, on a country-by-country basis, until the last to
expire patent claims associated with such products and services expire or are no longer in force. No payments have been made in connection
with a royalty pool. As of July 31, 2025, the last to expire patent claim is to remain in force until fiscal 2034.

 Release Agreements

 On August 4, 2025, John Goldberg resigned as
the Chief Medical Officer of the Company effective July 31, 2025. In connection with Dr. Goldberg's departure, the Company entered
into a general release agreement pursuant to which Dr. Goldberg will receive severance in the amount of $ 218,195 and, in lieu of any
entitlement for a performance bonus for the Company's fiscal year 2025, within twenty (20) days following the date of entry into
the contemplated general release, the Company will issue to Dr. Goldberg 99,429 shares of the Company's Class B common stock, such
shares to vest on November 10, 2025. On August 12, 2025, in connection with the separation, Dr. Goldberg also entered into a consulting
agreement with the Company providing for annual fees of $ 100,000 and the accelerated vesting, which will result in vesting on November
10, 2025, of all stock options and restricted stock in the Company previously granted to Dr. Goldberg. During the year ended July 31,
2025, the Company recognized $ 218,195 of severance expense to be paid subsequent to year end and approximately $ 96,000 of expense related
to the shares to be issued related to the general release agreement with Dr. Goldberg which is included in research and development expense
in the consolidated statements of operations and comprehensive loss.

 On July 31, 2025, N. Scott Fine resigned as the
Chief Executive Officer of Cyclo Therapeutics. In connection with Fine's departure, the Company entered into a general release
agreement pursuant to which Fine will receive severance in the amount of $ 852,168, which will be paid to Fine semi-monthly in thirty-six
(36) equal installments of $ 23,671.34 (less applicable taxes and withholdings). Effective August 1, 2025, Fine was named Vice-Chairman
of the Company. Fine's outstanding and unvested equity awards shall continue to vest, in accordance with the terms of the 2021
Equity Incentive Plan and Cyclo Therapeutics, Inc. 2021 Omnibus Equity Incentive Plan through the last day of Employee's service
as Vice-Chairman of the Company. The Company recognized $ 852,168 of severance expense during the year ended July 31, 2025 related to
the general release agreement with Fine which is included in general and administrative expense in the consolidated statements of operations
and comprehensive loss.

 NOTE 24 – EQUITY

 Share Repurchase Program

 Effective April 14, 2023, the Company's
Board of Directors approved a share repurchase program (the "2023 Share Repurchase Program") authorizing the repurchase of
up to $ 5 million of the Company's Class B common stock. Under the 2023 Share Repurchase Program, the Company was authorized to
purchase, at purchase prices up to $ 1.75 per share, shares of its Class B common stock from time to time until June 16, 2023 (the "Plan
Termination Date"). In July 2023, the 2023 Share Repurchase Program was amended to extend the Plan Termination Date to July 1,
2024.

 The Company has repurchased 101,487 of its Class
B common stock for a total cost of $ 168 thousand under the 2023 Share Repurchase Program. On December 22, 2023, the Company suspended
the share repurchase program through the Plan Termination Date.

 Class A Common Stock and Class B Common Stock

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

 F- 50

 On May 27, 2021, the Company filed a Registration
Statement on Form S-3, whereby the Company may sell up to $ 250 million of Class B common stock. This Registration Statement was declared
effective on June 7, 2021.

 On June 1, 2021, the Company filed a Registration
Statement on Form S-3 to issue 48,859 shares of Class B common stock for payment due on the purchase of Altira, an investment which has
been subsequently fully impaired.

 On August 19, 2021, the Company entered into
a Securities Purchase Agreement (the "Institutional Purchase Agreement") with certain third-party institutional investors
(the "Institutional Investors") and a Securities Purchase Agreement with I9Plus, LLC (the "Jonas Purchase Agreement"),
an entity affiliated with Howard S. Jonas, the Chairman of the Board of Directors of the Company. On August 24, 2021, the Company issued
 2,833,425 shares of Class B common stock (the "Institutional Shares"), par value $ 0.01 per share, to the Institutional Investors,
at a purchase price equal to $ 35.00 per share, for aggregate gross proceeds of approximately $ 99.2 million, before deducting placement
agent fees and other offering expenses. Additionally, pursuant to the Jonas Purchase Agreement, the Company issued 112,501 shares of
Class B common stock to I9Plus, LLC, at a purchase price equal to $ 44.42 per share, which was equal to the closing price of a share of
the Class B common stock on the New York Stock Exchange on August 19, 2021 (the "Jonas Offering"). The Jonas Offering resulted
in additional aggregate gross proceeds of approximately $ 5.0 million. The total net proceeds from the issuance of shares were $ 98.0 million
after deducting transaction costs of $ 6.2 million.

 On August 19, 2021, in connection with the Institutional
Purchase Agreement, the Company entered into a Registration Rights Agreement with the Institutional Investors whereby the Company agreed
to prepare and file a registration statement with the SEC within 30 days after the earlier of (i) the date of the closing of the Merger
Agreement, and (ii) the date the Merger Agreement is terminated in accordance with its terms, for purposes of registering the resale
of the Institutional Shares and any shares of Class B common stock issued as a dividend or other distribution with respect to the Institutional
Shares.

 On February 15, 2022, the Company filed a Registration
Statement on Form S-3 (as amended on March 2, 2022) registering the resale by the Institutional Investors of the shares purchased by
them. The Registration Statement was declared effective on March 7, 2022.

 In March 2018, the Company established its 2018
Equity Incentive Plan. On January 19, 2022, the Company's stockholders approved the 2021 Equity Incentive Plan (the "2021
Plan"). The 2018 Equity Incentive Plan was suspended and replaced by the 2021 Plan and, following January 19, 2022, no new grants
are to be awarded under the 2018 Equity Incentive Plan. Existing grants under the 2018 Equity Incentive Plan will not be impacted by
the adoption of the 2021 Plan. Any of the Company's employees, directors, consultants, and other service providers, and those of
the Company's affiliates, are eligible to participate in the 2021 Plan. In accordance with applicable tax rules, only employees
(and the employees of parent or subsidiary corporations) are eligible to be granted incentive stock options. The 2021 Plan authorizes
stock options (both incentive stock options or non-qualified stock options), stock appreciation rights, restricted stock, restricted
stock units, and cash or other stock-based awards. On January 19, 2022, the Company filed a Registration Statement on Form S-8 registering
 1,919,025 shares of Class B common stock reserved for issuance under the 2021 Plan. On November 28, 2022, the Company's Board of
Directors approved an amendment to the 2021 Plan that, among other things, increases the number of shares of the Company's Class
B common stock available for the grant of awards thereunder by an additional 696,770, which the stockholders approved on January 23,
2023. On January 9, 2025, the Company's Board of Directors approved an amendment to the 2021 Plan that, among other things, increases
the number of shares of the Company's Class B common stock available for the grant of awards thereunder by an additional 750,000,
which the stockholders approved on January 13, 2025. The maximum number of shares of Class B common stock that may be issued under the
2021 Plan is 3,365,795 shares. As of July 31, 2025, there were 153,879 shares still available for issuance under the 2021 Plan.

 On July 6, 2022, pursuant to the I9 SPA dated
June 22, 2022 with I9 Plus, LLC, an entity affiliated with members of the family of Howard Jonas, the Company sold 3,225,806 shares of
the Company's Class B common stock to I9 Plus, LLC at a price per share of $ 1.86 and an aggregate sale price of $ 6 million.

 F- 51

 Employment Agreement

 On June 13, 2022, the Company entered into an
employment agreement with Howard S. Jonas (who serves as the Chairman of the Board and Executive Chairman of the Company) (the "Employment
Agreement"), which provides, among other things: (i) a term of five years (subject to extension unless either party elects not
to renew); (ii) an annual base salary of $ 260,000, of which $ 250,000 is payable through the issuance of restricted shares of the Company's
Class B common stock with the value of the shares based upon the volume weighted closing price of the Class B Stock on the NYSE on the
thirty days ending with the NYSE trading day immediately preceding the issuance to be issued within thirty days of the date of the Employment
Agreement (the "Start Date") and each annual anniversary, and such shares vesting, contingent on Mr. Jonas' remaining
in continuous service to the Company, in substantially equal amounts on the three, six, nine and twelve month anniversaries of the Start
Date or annual anniversary; and (iii) a grant of restricted shares of Class B common stock with a value of $ 600,000, issuable within
30 days with the value of the shares based upon the volume weighted closing price of the Class B common stock on the NYSE on the 30 days
ending with the NYSE trading day immediately preceding the issuance and such shares, and vesting, contingent on Mr. Jonas remaining in
continuous service to the Company, in substantially equal amounts on the first and second annual anniversaries of the Start Date. On
June 19, 2024, the Employment Agreement was amended to provide an annual base salary of $ 294,000, of which $ 250,000 is payable through
the issuance of Class B common stock in accordance with the terms defined above.

 Stock Options

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

 Number of
 Options

 Exercise
 Price

 Remaining
 Contractual
 Term (in years)

 Aggregate
 Intrinsic Value

 Outstanding at July 31, 2024

 638,409

 $
 9.55

 8.39

 $
 —

 Rollover Options

 618,702

 5.84

 8.30

 Granted

 395,000

 1.98

 9.65

 —

 Expired

 —

 —

 —

 —

 Cancelled / Forfeited

 —

 —

 —

 —

 Outstanding at July 31, 2025

 1,652,111

 $
 6.65

 8.26

 $
 —

 Exercisable at July 31, 2025

 371,846

 $
 14.94

 6.86

 $
 —

 At July 31, 2025, there were unrecognized
compensation costs related to non-vested stock options of $ 0.9 million, which are expected to be recognized over the next 3.7 years.

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

 July 31, 2025

 Risk-free interest rate

 4.10
 %

 Expected term (in years)

 6.25

 Expected volatility

 %

 Expected dividend yield

 —

 %

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

 As part of the Cyclo Merger, Historical Cyclo
Options to purchase Cyclo Common Stock, issued under Cyclo's 2021 Equity Incentive Plan, that were outstanding immediately prior
to the Merger were converted into options to purchase, on substantially similar terms and conditions, 618,702 shares of Rafael's
Class B common stock at an adjusted exercise price per share based upon the Exchange Ratio (the "Rollover Options").

 Rafael Medical Devices Stock Options

 The Rafael Medical Devices 2022 Equity Incentive
Plan (the "RMD 2022 Plan") was created and adopted by the Company in May 2022. The RMD 2022 Plan allows for the issuance
of up to 10,000 shares of Class B common stock which may be awarded in the form of incentive stock options or restricted shares.

 In connection with the conversion of Rafael Medical
Devices from a Delaware corporation to a Delaware limited liability company, Rafael Medical Devices adopted the Rafael Medical Devices,
LLC 2023 Equity Incentive Plan (the "RMD 2023 Plan") in August 2023. The RMD 2023 Plan allows for issuance of up to 46,125
Class A Units. There were 16,872 Units available for issuance under the RMD 2023 Plan as of July 31, 2025.

 F- 52

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

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

 Number of
 Options

 Exercise
 Price

 Remaining
 Contractual
 Term (in years)

 Aggregate
 Intrinsic Value

 Outstanding at July 31, 2024

 43,878

 $
 10.00

 9.01

 $
 —

 Cancelled / Forfeited

 ( 14,625
)

 10.00

 9.01

 —

 Outstanding at July 31, 2025

 29,253

 $
 10.00

 8.01

 $
 —

 Exercisable at July 31, 2025

 16,228

 $
 10.00

 8.01

 $
 —

 At July 31, 2025, the total unrecognized
compensation related to stock option awards granted was $ 106 thousand, which the Company expects to recognize over a weighted average
period of approximately 2.0 years.

 Cornerstone Stock Options

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

 At July 31, 2025, there were 1,004,341 options
outstanding granted under the Plans that are vested with a weighted average exercise price of $ 24.17 per share and a weighted average
remaining contractual term of 4.4 years. The fair value of outstanding options granted under the Plans assumed during the Cornerstone
Acquisition were determined to be de minimis.

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

 As part of the Cornerstone Restructuring, as
detailed in Note 3, Cornerstone increased the available reserve of Cornerstone Common Stock for grant to employees, consultants and other
service providers to approximately 10 % of Cornerstone's capital stock following the Cornerstone Restructuring, the Mandatory Common
Conversion and the Reverse Stock Split (the "Reserve Increase") but prior to the issuance of the RPF 6 % Top Up Shares or
any shares to the holders of the Remaining Series C Convertible Notes after the Closing.

 F- 53

 Replacement Warrants

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

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

 Replacement Warrants issued as part of the Cyclo Merger on March 25, 2025

 1,087,100

 Expired

 ( 28,198
)

 Warrants outstanding, July 31, 2025

 1,058,902

 The following table presents the number of common
stock warrants outstanding, their exercise price, and expiration dates as of July 31, 2025 (the names below refer to the related Cyclo
transaction prior to the Merger):

 Name

 Warrants Issued

 Exercise Price

 Expiration Date

 December 2018 Units Offering Warrant

 12,407

 $
 184.41

 12/21/2025

 Placement Agent Warrants April 2020 Think Equity Tail

 $
 31.21

 9/27/2025

 August 2020 PIPE Warrant

 64,543

 $
 42.56

 8/27/2027

 2020 Public Offering

 380,253

 $
 14.19

 12/11/2025

 Placement Agent Warrants December 2020 Maxim

 20,268

 $
 17.73

 12/11/2025

 April 2023 PIPE Warrants

 253,280

 $
 2.01

 4/20/2030

 October 2023 Warrant Exchange

 327,368

 $
 2.70

 10/23/2027

 1,058,902

 Restricted Stock

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

 In January 2022, the Company granted 33,360 restricted
shares of Class B common stock to non-employee directors, 18,336 of which were granted under the 2018 Equity Incentive Plan, and 15,024
of which were granted under the 2021 Plan. The restricted shares vested immediately on the grant date. The share-based compensation cost
was approximately $ 151 thousand, which was included in general and administrative expense in the consolidated statements of operations
and comprehensive loss.

 On February 1, 2022, the Company issued 986,835
shares of Class B restricted stock to two executive officers. Approximately 24 % of the restricted shares vested in December 2022, with
the remaining shares vesting ratably each quarter through December 2025.

 On June 14, 2022, the Company issued 452,130
shares of Class B restricted stock to Howard S. Jonas.

 In January 2023, the Company issued 120,019 shares
of Class B restricted stock to certain members of its Board of Directors, and 100,000 shares of Class B restricted stock to its Chief
Financial Officer.

 On August 28, 2023, the Company issued 111,408
shares of Class B restricted stock to Howard S. Jonas.

 On October 25, 2023, the Company issued 135,000
shares of Class B restricted stock to employees of the Company.

 On January 5, 2024, the Company issued 101,402
shares of Class B restricted stock to certain members of its Board of Directors.

 On June 13, 2024, the Company issued 159,016
shares of Class B restricted stock to Howard S. Jonas.

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

 F- 54

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

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

 On September 2, 2025, the Company issued 99,429
shares of Class B restricted stock to John Goldberg, a consultant of the Company.

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

 Number
 of
 Non-vested

 Grant
 Date Fair Value

 Outstanding at July 31, 2024

 608,540

 $
 2.99

 Granted

 473,514

 1.97

 Cancelled / Forfeited

 ( 31,875
)

 7.40

 Vested

 ( 633,459
)

 2.88

 Non-vested shares at July 31, 2025

 416,720

 $
 1.99

 At July 31, 2025, there was $ 0.6 million
of total unrecognized compensation cost related to non-vested stock-based compensation arrangements, which is expected to be recognized
over the next 3.5 years.

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

 For the Year Ended

 2025

 2024

 $
 1,962

 $
 2,000

 Forfeiture of RSUs within research and development

 ( 5
)

 —

 Total stock-based compensation expense, net of forfeitures

 $
 2,123

 $
 2,296

 NOTE 25 – LEASES

 The Company is the lessor of the Israeli property
which is leased to tenants under net operating leases expiring in 2025 and 2027. Lease income included on the consolidated statements
of operations was $ 309 thousand and $ 282 thousand for the years ended July 31, 2025 and 2024, respectively. During the years ended July
31, 2025 and 2024, no real estate property taxes were included in rental income.

 The future contractual minimum lease payments
to be received (excluding operating expense reimbursements) by the Company as of July 31, 2025, under a non-cancellable operating
lease are as follows:

 Years Ending July 31,

 Total

 2026

 $

 2027

 2028

 Total Minimum Future Rental Income

 $

 F- 55

 NOTE 26 - EMPLOYEE RETENTION CREDITS

 During the year ended July 31, 2025, the Company
recorded refunds as a result of Employee Retention Credits (ERC), 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 Company's
accounting policy, the ERC amounts have been recognized in other income, net as the Company determined that all relevant criteria for
recognition had been met. The ERC represents a one-time benefit and does not constitute recurring operational income.

 For the year ended July 31, 2025, the Company
recorded $ 236 thousand in employee retention credits and $ 36 thousand of related interest within other income and interest income, respectively,
in the consolidated statement of operations. This consists of refund claims filed on Form 941 for the first quarter of 2021. As of July 31,
2025, the Company accrued for the total $ 272 thousand as other receivables on the consolidated balance sheet. Additional ERC of $ 933
thousand was acquired in the Cyclo Merger and is included in other receivables on the consolidated balance sheet as of July 31, 2025.
All ERC and accrued interest due to the Company was received in full in August 2025.

 NOTE 27 – SUBSEQUENT EVENTS

 On August 4, 2025, Joshua Fine was elected as
the Company's Chief Operating Officer. Joshua Fine is the son of N. Scott Fine who serves as an ex-officio director of the Company
and Vice Chairman of the Company's Board of Directors.

 In connection with Joshua Fine's election
as the Company Chief Operating Officer, he and the Company entered into a Novation and Amendment (the "Amendment") to the
Amended and Restated Executive Employment Agreement between Joshua Fine and Cyclo Therapeutics, Inc. (which amended and restated the employment
agreement that was previously filed as an exhibit to Amendment No. 4 to the Company's Registration Statement on S-4 filed with the
Securities and Exchange Commission ("SEC") on February 11, 2025) pursuant to which Mr. Fine's base salary was increased
to $ 428,000 per annum and Mr. Fine was granted 24,558 options to purchase shares of the Company's Class B common stock, with the
fair value of the options determined to be $ 25,000 as of the date of the grant.

 On September 21, 2025, the Company entered into
a Second Series Seed Preferred Share Purchase Agreement with NINA Medical Ltd. ("NINA"), pursuant to which the Company invested
$ 500,000 in exchange for 86,983 Series Seed Preferred Shares, representing 6.3 % of NINA's outstanding shares. In connection with
the investment, the Company also received a warrant to purchase an additional 173,965 Seed Preferred Shares at an exercise price per
share equal to $ 5.75, with a term of five years from the date of issuance. Howard S. Jonas holds an indirect investment in NINA, therefore
the Company's investment in NINA is a related party transaction.

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