NOTE 2 — LIQUIDITY

The Company is in the clinical stage and has not yet generated any revenues. For the three months ended September 30, 2022, the Company incurred a net loss of $9.8 million and net cash used in operating activities amounted to $7.6 million. For the fiscal year ended June 30, 2022, the Company incurred a net loss of $41.1 million and net cash used in operating activities amounted to $39.6 million. As of September 30, 2022, the Company had an accumulated deficit of $219.0 million, cash and cash equivalents of $154.3 million, and total current liabilities of $2.4 million.

As discussed in Note 4, the Company is subject to license agreements that provide for future contractual payments upon achievement of various milestone events. Pursuant to the ActiveSite License Agreement (as defined below), a $3.0 million milestone payment will be due upon dosing of the first patient in a Phase 2 clinical trial for RZ402. Additionally, pursuant to the XOMA License Agreement (as defined below), a $5.0 million milestone payment will be due upon dosing of the first patient in a Phase 3 clinical trial for RZ358.  First patient dosing milestones for the RZ402 Phase 2 clinical trial and RZ358 Phase 3 clinical trial are expected to occur within the next 12 months.

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Management believes the Company’s cash and cash equivalents balance of $154.3 million as of September 30, 2022, will be adequate to meet the Company’s contractual obligations and carry out ongoing clinical trials and other planned activities at least through November 2023.