NOTE 2 — LIQUIDITY

As a clinical stage business, the Company has not yet generated any revenues and had an accumulated deficit of $275.5 million as of September 30, 2023. For the three months ended September 30, 2023, the Company incurred a net loss of $14.5 million and net cash used in operating activities amounted to $10.6 million. For the fiscal year ended June 30, 2023, the Company incurred a net loss of $51.8 million and net cash used in operating activities amounted to $44.5 million. As of September 30, 2023, the Company’s capital resources consist of cash and cash equivalents of $8.1 million, short-term investments in marketable debt securities of $90.7 million and long-term investments in marketable debt securities of $8.1 million.

As of September 30, 2023, the Company has total liabilities of $9.4 million, including current liabilities of $7.2 million. As discussed in Note 5, the Company is subject to license agreements that provide for future contractual payments upon achievement of various milestone events. 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 and an additional $5.0 million milestone payment will be due upon the dosing of the last patient in a Phase 3 clinical trial for RZ358. The first patient dosing milestone event in connection with the RZ358 Phase 3 clinical trial is expected to occur within the next 12 months.

Management believes the Company’s existing cash and cash equivalents and investments in marketable debt securities will be adequate to meet the Company’s contractual obligations and carry out ongoing clinical trials and other planned activities through November 2024, at a minimum.