What changed in this filing

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Item 1A. Risk Factors

2025-07-09 compared with 2025-04-08 · 66 added, 46 removed, 1542 unchanged (7% of the section changed)

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We expect to incur losses over at least the next several years and may never achieve or maintain profitability.

Our net loss was $ 193.6 million for the fiscal year ended November 30, 2024, and $56.4 million for the three months ended February 28, 2025.

As of February 28, 2025, we had an accumulated deficit of $795.1 million.

Our net loss was $ 193.6 million for the fiscal year ended November 30, 2024, and $99.8 million for the six months ended May 31, 2025.

As of May 31, 2025, we had an accumulated deficit of $838.6 million.

To date, we have not generated any revenue from product sales and have financed our operations primarily through our collaborations and sales of our equity interests.

We are in the early stages of development of our drug candidates.

Our lead drug candidates, bexobrutideg (NX-5948), NX-2127 and NX-1607, are in the early stages of clinical development.

Our lead drug candidates, bexobrutideg (NX-5948), zelebrudomide (NX-2127) and NX-1607, are in the early stages of clinical development.

We expect to continue to incur significant expenses and increasing operating losses for at least the next several years.

We anticipate that our operating expenses and capital expenditure requirements will increase substantially if and as we:

• increase enrollment in and further develop our drug candidates bexobrutideg, NX-2127 and NX-1607 through Phase 1 clinical trials;

• increase enrollment in and further develop our drug candidates bexobrutideg, zelebrudomide and NX-1607 through Phase 1 clinical trials;

• submit investigational new drug applications (INDs) and initiate clinical trials of our other drug candidates;

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We have never generated revenue from product sales and may never be profitable.

We are in the early stages of clinical development of our lead drug candidates bexobrutideg (NX-5948), NX-2127 and NX-1607.

We are in the early stages of clinical development of our lead drug candidates bexobrutideg (NX-5948), zelebrudomide (NX-2127) and NX-1607.

We expect that it will be many years, if ever, before we have a drug candidate ready for commercialization.

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If we are unable to raise capital when needed, we may be required to delay, limit, reduce or terminate our research or product development programs or future commercialization efforts.

We expect our expenses to increase substantially in connection with our ongoing activities, particularly as we conduct our Phase 1 clinical trials of bexobrutideg (NX-5948), NX-2127 and NX-1607 and any future development of our drug candidates, grow our pipeline of drug candidates, expand the breadth of our DEL-AI platform, continue research and development and initiate additional clinical trials of and potentially seek marketing approval for our lead programs and other drug candidates.

We expect our expenses to increase substantially in connection with our ongoing activities, particularly as we conduct our Phase 1 clinical trials of bexobrutideg (NX-5948), zelebrudomide (NX-2127) and NX-1607 and any future development of our drug candidates, grow our pipeline of drug candidates, expand the breadth of our DEL-AI platform, continue research and development and initiate additional clinical trials of and potentially seek marketing approval for our lead programs and other drug candidates.

In addition, if we obtain marketing approval for any of our drug candidates, we expect to incur significant commercialization expenses related to product manufacturing, marketing, reimbursement and sales and distribution.

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If we are unable to raise capital when needed or on attractive terms, we may be required to delay, limit, reduce or terminate our research, product development programs or any future commercialization efforts or grant rights to develop and market drug candidates that we otherwise would prefer to develop and market ourselves.

We had cash, cash equivalents and marketable securities of $549.7 million as of February 28, 2025.

We had cash, cash equivalents and marketable securities of $485.8 million as of May 31, 2025.

We believe that our existing cash, cash equivalents and marketable securities will be sufficient to fund our operating expenses and capital expenditure requirements through at least the next 12 months.

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Our future capital requirements will depend on many factors, including:

• the progress, costs and results of our Phase 1 clinical trials for bexobrutideg, NX-2127 and NX-1607 and any future clinical development of such drug candidates;

• the progress, costs and results of our Phase 1 clinical trials for bexobrutideg, zelebrudomide and NX-1607 and any future clinical development of such drug candidates;

• the scope, progress, costs and results of preclinical and clinical development for our other drug candidates and development programs;

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We are early in our development efforts.

Our lead drug candidates, bexobrutideg (NX-5948), NX-2127 and NX-1607, are in the early stages of clinical development.

Our lead drug candidates, bexobrutideg (NX-5948), zelebrudomide (NX-2127) and NX-1607, are in the early stages of clinical development.

If we are unable to advance our drug candidates through clinical development, develop, obtain regulatory approval for and commercialize our drug candidates or experience significant delays in doing so, our business may be materially harmed.

We are early in our development efforts.

Our lead drug candidates, bexobrutideg (NX-5948), NX-2127 and NX-1607, are in the early stages of clinical development and their risk of failure is high.

Our lead drug candidates, bexobrutideg (NX-5948), zelebrudomide (NX-2127) and NX-1607, are in the early stages of clinical development and their risk of failure is high.

We have invested substantially all of our efforts and financial resources in building our DEL-AI platform, in the identification and preclinical development of our current drug candidates and in the preparation for and initiation of Phase 1 clinical trials for our lead drug candidates, as well as the preparation to advance bexobrutideg into a Phase 2 clinical trial, anticipated in 2025.

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Further, certain patients have shown inherent (primary) resistance to approved BTK inhibitors and other patients have developed acquired (secondary) resistance to these inhibitors.

Both bexobrutideg (NX-5948) and NX-2127 degrade BTK with mutations that confer resistance to currently marketed BTK inhibitors, and we believe that preliminary data from our ongoing Phase 1 trials of bexobrutideg and NX-2127 may provide evidence of clinical benefit to patients with such resistance mutations.

Both bexobrutideg (NX-5948) and zelebrudomide (NX-2127) degrade BTK with mutations that confer resistance to currently marketed BTK inhibitors, and we believe that preliminary data from our ongoing Phase 1 trials of bexobrutideg and zelebrudomide may provide evidence of clinical benefit to patients with such resistance mutations.

However, any inherent primary or acquired secondary resistance to our BTK degraders in patients would prevent or diminish their clinical benefit.

We are in the early stages of clinical development of bexobrutideg and NX-2127 and we currently have limited safety data of bexobrutideg and NX-2127 in humans.

We are in the early stages of clinical development of bexobrutideg and zelebrudomide and we currently have limited safety data of bexobrutideg and zelebrudomide in humans.

Although some of our drug candidates have produced observable results in animal studies, these drug candidates may not demonstrate the same chemical and pharmacological properties in humans, and may interact with human biological systems in unforeseen, ineffective or harmful ways.

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Second- and third-line therapies are administered to patients when prior therapy was ineffective.

Our current and planned clinical trials for our drug candidates bexobrutideg, NX-2127 and NX-1607 are and will be with patients who have received one or more prior treatments.

Our current and planned clinical trials for our drug candidates bexobrutideg, zelebrudomide and NX-1607 are and will be with patients who have received one or more prior treatments.

Subsequently, for those drug candidates that prove to be sufficiently beneficial, if any, we may seek approval potentially as a first-line therapy, but any drug candidates we develop, even if approved, may not be approved for first-line therapy, and, prior to any such approvals, we may have to conduct additional clinical trials.

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It is impossible to predict when or if any drug candidates we may develop will prove safe in humans.

There is a limited safety data set for the effects of bexobrutideg (NX-5948), NX-2127 and NX-1607 in animals and we only recently have begun to test the safety of our drug candidates in humans.

There is a limited safety data set for the effects of bexobrutideg (NX-5948), zelebrudomide (NX-2127) and NX-1607 in animals and we only recently have begun to test the safety of our drug candidates in humans.

There can be no assurance that our current drug candidates or any future drug candidate will not cause undesirable side effects.

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In particular, the small number of patients in our planned early clinical trials may make the results of these trials less predictive of the outcomes of later clinical trials.

For example, even if successful, the results of our initial clinical trials for bexobrutideg (NX-5948), NX-2127 and NX-1607 may not be predictive of the results of further clinical trials of these drug candidates or any of our other drug candidates.

For example, even if successful, the results of our initial clinical trials for bexobrutideg (NX-5948), zelebrudomide (NX-2127) and NX-1607 may not be predictive of the results of further clinical trials of these drug candidates or any of our other drug candidates.

Moreover, preclinical and clinical data often are susceptible to varying interpretations and analyses, and many companies that have believed their drug candidates performed satisfactorily in preclinical studies and clinical trials nonetheless have failed to obtain marketing approval of their products.

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We may not be able to initiate or continue clinical trials for our drug candidates if we are unable to locate and enroll a sufficient number of eligible patients to participate in these trials as required by the FDA or similar regulatory authorities outside of the United States.

In particular, we are currently conducting Phase 1 clinical trials for each of our lead drug candidates, bexobrutideg (NX-5948), NX-2127 and NX-1607, and we expect to initiate a Phase 2 clinical trial of bexobrutideg in 2025.

In particular, we are currently conducting Phase 1 clinical trials for each of our lead drug candidates, bexobrutideg (NX-5948), zelebrudomide (NX-2127) and NX-1607, and we expect to initiate a Phase 2 clinical trial of bexobrutideg in 2025.

We cannot predict how difficult it will be to enroll patients for these trials.

Therefore, our ability to identify and enroll eligible patients for our bexobrutideg, NX-2127 and NX-1607 clinical trials may be limited or may result in slower enrollment than we anticipate.

Therefore, our ability to identify and enroll eligible patients for our bexobrutideg, zelebrudomide and NX-1607 clinical trials may be limited or may result in slower enrollment than we anticipate.

In addition, some of our competitors have ongoing clinical trials for drug candidates that treat the same indications as our drug candidates, and patients who otherwise would be eligible for our planned clinical trials instead may enroll in clinical trials of our competitors’ drug candidates.

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If we or any of our third-party manufacturers encounter such difficulties, our ability to provide supply of our current or future drug candidates for clinical trials, our ability to obtain marketing approval or our ability to provide supply of our drug candidates for patients, if approved, could be delayed or stopped.

For example, in October 2023, following our communication to the FDA of our intention to transition to an improved manufacturing process for NX-2127, the FDA placed a partial clinical hold on our ongoing Phase 1 clinical trial evaluating NX-2127.

For example, in October 2023, following our communication to the FDA of our intention to transition to an improved manufacturing process for zelebrudomide (NX-2127), the FDA placed a partial clinical hold on our ongoing Phase 1 clinical trial evaluating zelebrudomide.

We actively engaged in discussions with FDA as part of our efforts to lift the partial clinical hold, and in March 2024, the FDA lifted the partial clinical hold.

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We rely on third parties to conduct our clinical trials, and those third parties may not perform satisfactorily, including failing to meet deadlines for completing such trials.

We rely on third-party contract research organizations (CROs) to conduct our Phase 1 clinical trial programs for bexobrutideg (NX-5948), NX-2127 and NX-1607 and we will rely on third-party CROs to conduct any clinical trials for other drug candidates.

We rely on third-party contract research organizations (CROs) to conduct our Phase 1 clinical trial programs for bexobrutideg (NX-5948), zelebrudomide (NX-2127) and NX-1607 and we will rely on third-party CROs to conduct any clinical trials for other drug candidates.

Agreements with these CROs might terminate for a variety of reasons, including for such CRO’s failure to perform.

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Any unfavorable government policies on international trade, such as export controls, capital controls or tariffs, new legislation or regulations, renegotiation of existing trade agreements, or any retaliatory trade actions due to recent or future trade tension, may impede, delay, limit, or increase the cost of manufacturing our therapeutic candidates.

For example, in April 2025, the United States announced extensive tariffs on goods imported from China, where certain of our third-party manufacturers are located.

While we believe we currently have sufficient inventory for clinical use and do not anticipate any near-term impact to our clinical programs, we expect these tariffs may increase the cost of our product supply in the future.

Such events could result in our clinical or commercial supply of drug, packaging and other services being interrupted or limited, which could harm our business.

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Supply chain disruptions and delays as a result of any new tariff policies or trade restrictions could also negatively impact our cost of materials and production processes.

For example, during the prior Trump administration, increased tariffs were implemented on goods imported into the United States, particularly from China, Canada, and Mexico.

On February 1, 2025, the United States imposed a 25% tariff on imports from Canada and Mexico, which were subsequently suspended for a period of one month, and a 10% additional tariff on imports from China, and on April 2, 2025, the United States announced a baseline 10% tariff on all foreign goods, with goods imported from specified nations, including China and those in the European Union, taxed at higher rates.

For example, the United States has announced tariffs on many goods imported from specified nations, including China and those in the European Union.

In addition, there are currently discussions concerning potential increased tariffs for pharmaceutical products, which may impact our supply chain and create uncertainty in the broader pharmaceutical industry.

While certain tariffs have been suspended, modified or temporarily reduced, we cannot predict the results of the U.S.

government’s trade negotiations or the outcome of ongoing legal challenges to specific tariff policies.

If we are unable to obtain these chemical or biological intermediates or NHPs in sufficient quantity and in a timely manner due to disruptions in the global supply chain caused by macroeconomic events and conditions, the development, testing and clinical trials of that drug candidate may be delayed or infeasible, and regulatory approval or commercial launch of any resulting product may be delayed or not obtained, which could significantly harm our business.

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In addition, any threat to the breadth or strength of protection provided by our patents and patent applications could dissuade companies from collaborating with us to license, develop or commercialize current or future drug candidates.

Further, recent reforms and changes at government agencies of the United States and those of non-U.S.

jurisdictions could increase the delays, uncertainties and costs surrounding the prosecution of our patent applications, and the maintenance, enforcement, or defense of our issued patents.

For example, the ability of the USPTO and other applicable patent authorities to properly administer their functions is highly dependent on the levels of funding available to the agency and their ability to retain personnel and fill key leadership appointments, among various factors.

Termination of employees or delays in replacing or hiring for positions could significantly impact the ability of the USPTO and other applicable patent authorities to fulfill their functions and could greatly impact our ability to timely and adequately prosecute or maintain our patent applications, and our ability to timely and adequately maintain, enforce, or defend our issued patents.

Even if our patent applications issue as patents and are unchallenged, they may not issue in a form that will provide us with any meaningful protection against competing products or processes sufficient to achieve our business objectives, prevent competitors and other third parties from competing with us or otherwise provide us with any competitive advantage.

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For example, we are aware of a patent owned by a third party with a claim that covers many potential targeted protein degraders.

This patent may be alleged to cover one or more of our targeted protein degrader drug candidates, including our bexobrutideg (NX-5948) and NX-2127 drug candidates.

This patent may be alleged to cover one or more of our targeted protein degrader drug candidates, including our bexobrutideg (NX-5948) and zelebrudomide (NX-2127) drug candidates.

While we believe that we have valid defenses against any assertion of such patent against us, such defenses may be unsuccessful.

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If we decide to seek Orphan Drug Designation or other designations from regulators for any of our other or future drug candidates, we may be unsuccessful or may be unable to maintain the benefits associated with these designations, including the potential for supplemental market exclusivity associated with an Orphan Drug Designation.

In March 2025, the FDA granted Orphan Drug Designation to bexobrutideg (NX-5948) for the treatment of Waldenström macroglobulinemia.

In March 2025, the FDA granted Orphan Drug Designation to bexobrutideg (NX-5948) for the treatment of Waldenström macroglobulinemia, and in June 2025, the EMA granted Orphan Drug Designation to bexobrutideg for the treatment of adult patients with lymphoplasmacytic lymphoma, of which Waldenström macroglobulinemia is the most common subtype.

As part of our business strategy, we may also seek Orphan Drug Designation or other designations from regulators for other of our current or future drug candidates.

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Some of these efforts have manifested to date in the form of FDA reductions in workforce or other personnel measures that could impact the FDA’s ability to hire and retain key personnel, which could result in delays or limitations on our ability to obtain guidance from the FDA on our product candidates in development and obtain the requisite regulatory approvals in the future.

Moreover, additional changes to budget and staffing of other governmental agencies, including but not limited to those within the Department of Health and Human Services, could affect development activities such as enrollment and conduct of clinical trials.

Moreover, additional changes to budget and staffing of other governmental agencies, including but not limited to those within the Department of Health and Human Services (HHS), could affect development activities such as enrollment and conduct of clinical trials.

There remains general uncertainty regarding future activities.

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and, beginning in 2023, penalize drug companies that raise prices for products covered under Medicare Parts B and D faster than inflation, among other reforms.

The CMS has taken a number of steps to implement the IRA, including:

on August 29, 2023, releasing the initial list of ten drugs subject to price negotiations;

on August 15, 2024, releasing the negotiated maximum prices for such drugs that will be effective beginning in 2026;

on October 2, 2024, releasing final guidance outlining the process for the second round of price negotiations for products subject to the “maximum fair price” provision;

and on December 20, 2024, releasing a list of 64 Medicare Part B products that had an adjusted coinsurance rate based on the inflationary rebate provisions of the IRA for the time period of January 1, 2025 to March 31, 2025.

Since its enactment, CMS has taken steps to implement various drug pricing provisions of the IRA.

This includes, without limitation, releasing the negotiated maximum prices, which will be effective in 2026, for the first ten drugs that were subject to the IRA’s negotiation process, releasing quarterly lists of Medicare Part B products that are subject to adjusted coinsurance rates based on the inflationary rebate provisions of the IRA, and announcing a list of fifteen additional drugs that will be subject to price negotiations during 2025.

It is unclear how future regulatory actions to implement the IRA, as well as the outcome of pending litigation against the IRA, may affect our products and future profitability, and we cannot predict the likelihood, nature, or extent of other health reform initiatives that may arise from future legislation or administrative actions.

Moreover, the results of the 2024 Presidential and Congressional elections, and potential subsequent developments, increase the uncertainty related to the healthcare regulatory environment.

Notably, recent actions taken by the Trump Administration have indicated that reducing prescription drug prices is a priority.

For example, President Trump has signed multiple executive orders addressing prescription drug pricing and access, including:

on April 15, 2025, outlining several actions the Secretary of the Department of HHS must take to optimize healthcare regulations that will provide access to prescription drugs at lower costs;

on May 5, 2025, aiming to promote domestic production of critical medicines;

and on May 12, 2025, aiming to establish a “most favored nation” drug pricing policy that would tie U.S.

drug prices to the prices paid for drugs in other countries.

Further, the current administration has suggested that it may impose tariffs on pharmaceuticals.

In addition, on June 28, 2024, the U.S.

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These measures could reduce the ultimate demand for our products, once approved, or put pressure on our product pricing.

Another emerging trend at the state level is the establishment of prescription drug affordability boards, some of which will prospectively permit certain states to establish upper payment limits for drugs that the state has determined to be “high-cost.”

Legislative and regulatory proposals have also been made to expand post-approval requirements and restrict sales and promotional activities for pharmaceutical products.

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If reimbursement of our drugs is unavailable or limited in scope or amount, or if pricing is set at unsatisfactory levels, our business could be materially harmed.

In particular, following the executive order of the Trump Administration of May 12, 2025, titled “Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients,” there may be an unpredictable effect on prices of medicinal products in European countries.

The Executive Order directs federal agencies to implement policies that would align U.S.

prescription drug prices with the lowest prices paid by other comparable nations and mandates the Secretary of HHS to communicate most-favored-nation (MFN) price targets to pharmaceutical manufacturers and, if significant progress is not achieved, to propose rulemaking to impose MFN pricing across federal healthcare programs and potentially the private market.

While the full scope and implementation timeline remain uncertain, this policy introduces significant risks to our future pricing strategies, revenue, and profitability in the U.S.

Additionally, the Executive Order instructs the Department of Commerce and the U.S.

Trade Representative to take action against foreign countries that engage in practices suppressing drug prices below fair market value, which could lead to increased pricing pressures or regulatory changes in international markets.

These developments, depending on whether and how they may be enacted, may adversely affect our global operations and financial performance.

Risks Related to Employees, Managing our Growth and Other Legal Matters

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In addition, such a breach may require notification to governmental agencies, the media or individuals pursuant to various federal and state data privacy and security laws (and other similar international laws), subject us to mandatory corrective action, and otherwise subject us to liability under laws and regulations that protect the privacy and security of personal information.

For example, data breaches frequently result in regulatory actions and commercial and class action litigation based on a variety of laws and legal duties, such as the California Consumer Privacy Act (CCPA), which provides for a private right of action in the event of certain data security breaches.

Additionally, the SEC adopted a new cybersecurity rule requiring companies subject to SEC reporting requirements to formally report material cybersecurity incidents, where failure to report may result in regulatory investigations leading to consent orders that may require additional compliance obligations and/or injunctions, fines and other penalties.

For example, data breaches frequently result in regulatory actions and commercial and class action litigation based on a variety of laws and legal duties, such as the California Consumer Privacy Act, as later amended by the California Privacy Rights Act (CCPA), which provides for a private right of action in the event of certain data security breaches.

Additionally, the SEC adopted a cybersecurity disclosure rule requiring companies subject to SEC reporting requirements to formally report material cybersecurity incidents, where failure to report may result in regulatory investigations leading to consent orders that may require additional compliance obligations and/or injunctions, fines and other penalties.

Such actions could result in significant legal and financial exposure and reputational damages that could have a material adverse effect on our business, financial condition, results of operations and prospects.

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The HHS has enforcement discretion for HIPAA, and any enforcement activity can result in financial liability and reputational harm, and responses to such enforcement activity can consume significant internal resources.

On April 22, 2024, OCR issued a Final Rule, the HIPAA Privacy Rule to Support Reproductive Health Care Privacy, which is intended to strengthen the HIPPA Privacy Rule by prohibiting the disclosure of protected health information related to lawful reproductive healthcare in certain circumstances.

In addition, states have shown an increased interest in regulating personal information in general and specifically in the privacy of health data.

On April 22, 2024, HHS issued a Final Rule, the HIPAA Privacy Rule to Support Reproductive Health Care Privacy, which is intended to strengthen the HIPPA Privacy Rule by prohibiting the disclosure of protected health information related to lawful reproductive healthcare in certain circumstances.

In addition, states have shown an increased interest in regulating the processing of personal information in general and specifically in the privacy of health data.

Washington state passed the My Health My Data Act, which took effect on March 31, 2024, and is focused on the collection of consumer health data.

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Notably, Senate Bill 370 does not include a private right of action nor does it apply to entities that are subject to HIPAA.

Connecticut also amended its comprehensive privacy law in 2023, the Connecticut Data Privacy Act, to impose obligations aimed at “consumer health data.” Furthermore, state attorneys general are authorized to bring civil actions seeking either injunctions or damages in response to violations that threaten the privacy of state residents pursuant to local state laws.

Connecticut also amended its comprehensive privacy law in 2023, the Connecticut Data Privacy Act, to impose obligations aimed at “consumer health data.” Virginia also recently updated its Consumer Protection Act for certain health information and other states are considering health privacy legislation.

Furthermore, state attorneys general are authorized to bring civil actions seeking either injunctions or damages in response to violations that threaten the privacy of state residents pursuant to local state laws.

We cannot be sure how these regulations will be interpreted, enforced or applied to our operations.

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state and international level, with new regulations coming into effect.

For example, the CCPA, which came into effect on January 1, 2020, and was amended and expanded by the California Privacy Rights Act (CPRA) as of January 1, 2023, provides California residents expanded privacy rights, including the right to request correction, access, and deletion of their personal information, the right to opt out of certain personal information sharing, and the right to receive detailed information about how their personal information is processed, including by California residents’ employers.

Additionally, the CCPA, requires companies that process personal information of California residents to make disclosures to consumers about their data collection, use and sharing practices, allow consumers to opt out of certain data sharing with third parties, complete certain audits and assessments when processing higher risk data and provide a private right of action for data breaches, as described above.

For example, the CCPA, which came into effect on January 1, 2020, and was amended and expanded by the California Privacy Rights Act as of January 1, 2023, provides California residents expanded privacy rights, including the right to request correction, access, and deletion of their personal information, the right to opt out of personal information sharing with certain third parties for cross-context behavioral advertising purposes, the right to limit the use of sensitive personal information, and the right to receive detailed information about how their personal information is processed, including by California residents’ employers.

Additionally, the CCPA, requires companies that process personal information of California residents to make disclosures to consumers about their data collection, use and sharing practices, complete certain audits and assessments when processing higher risk data and provide a private right of action for data breaches, as described above.

Although the CCPA includes limited exceptions—including exceptions for personal health information collected by covered entities or business associates subject to HIPAA, the CCPA may regulate or impact our processing of personal information depending on the context.

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Notably, following California’s lead, over a third of other U.S.

states enacted or proposed privacy laws that contain obligations similar to the CCPA and CPRA that have taken effect or will take effect in coming years.

states enacted or proposed privacy laws that contain obligations similar to the CCPA that have taken effect or will take effect in coming years.

In addition, a comprehensive federal privacy bill, which includes a private right of action for violations, has been proposed and is under review by the U.S.

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The UK has implemented the EU GDPR as the UK GDPR which sits alongside the UK Data Protection Act 2018 (the UK GDPR together with the EU GDPR, the GDPR).

The GDPR imposes compliance obligations on controllers (and in more limited cases, on processors), including granting certain privacy rights to individuals to control how companies collect, use, disclose, retain and otherwise process their personal data as well as specific requirements for obtaining valid consent where consent is the legal basis for processing, requirements around accountability and transparency, the obligation to consider data protection when any new products or services are developed, the obligation to appoint data protection officers in certain circumstances, the obligation to notify relevant data protection supervisory authorities of notifiable personal data breaches without undue delay (and no later than 72 hours) after becoming aware of the personal data breach, and the requirement to provide more detailed notices for clinical trial subjects and investigators.

The GDPR imposes compliance obligations on controllers (and in more limited cases, on processors), including (among others) granting certain privacy rights to individuals to control how companies collect, use, disclose, retain and otherwise process their personal data as well as specific requirements for obtaining valid consent where consent is the legal basis for processing, requirements around accountability and transparency, the obligation to consider data protection when any new products or services are developed, the obligation to appoint data protection officers in certain circumstances, the obligation to notify relevant data protection supervisory authorities of notifiable personal data breaches without undue delay (and no later than 72 hours) after becoming aware of the personal data breach, and the requirement to provide more detailed notices for clinical trial subjects and investigators.

In addition, the EU GDPR prohibits the international transfer of personal data originating in the EEA (including, from clinical trial sites and other third parties (e.g., CROs)) to jurisdictions that the European Commission does not recognize as having ‘adequate’ data protection laws, unless a data transfer mechanism has been put in place or a derogation under the EU GDPR can be relied upon.

In certain cases, including when transfers are made in reliance on standard contractual clauses (EU SCCs), including a requirement for companies to carry out a transfer impact assessment (TIA)—which (among other things) assesses laws governing access to personal data in the recipient country and considers whether supplementary measures that provide privacy protections additional to those provided under EU SCCs—will need to be implemented to ensure an ‘essentially equivalent’ level of data protection to that afforded in the EEA.

In certain cases, for example, when transfers are made in reliance on standard contractual clauses (EU SCCs), there is a requirement for companies to carry out a transfer impact assessment (TIA)—which (among other things) assesses laws governing access to personal data in the recipient country and considers whether supplementary measures that provide privacy protections additional to those provided under EU SCCs—will need to be implemented to ensure an ‘essentially equivalent’ level of data protection to that afforded in the EEA.

On July 10, 2023, the European Commission adopted its Final Implementing Decision granting the U.S.

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The European Commission has adopted an adequacy decision in favor of the UK, enabling data transfers from EU Member States to the UK without additional safeguards.

However, the UK adequacy decision will automatically expire in June 2025 unless the European Commission reassesses and renews/extends that decision, and remains under review by the European Commission during this period.

However, the UK adequacy decision will automatically expire in December 2025 unless the European Commission reassesses and further renews/extends that decision, and remains under review by the European Commission during this period.

The UK GDPR also imposes similar restrictions on transfers of personal data from the UK to jurisdictions that the UK Government does not consider adequate, including the United States.

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In the EU and other markets, potential new rules and restrictions on the flow of data across borders could increase the cost and complexity of doing business in those regions.

As a company, we have invested, and expect to continue to invest, significant time and resources in our GDPR compliance program.

As a company, we have invested, and expect to continue to invest, significant time and resources in our DPF certification and GDPR compliance program.

This is necessary to ensure we can initiate and maintain GDPR-compliant clinical trials in the EU or UK (as applicable).

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AI also presents emerging ethical issues and if our use of AI becomes controversial, we may experience brand or reputational harm, competitive harm, or legal liability.

Legislation governing the development and use of AI has been passed or is under consideration in the United States at the state and local level, as well as internationally.

Legislation and regulations governing the development and use of AI has been passed or is under consideration in the United States at the state and local level, as well as internationally.

As a result, the ability to use artificial intelligence and machine learning may be constrained by current or future laws, regulatory or self-regulatory requirements.

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however, any exercise would increase the number of shares eligible for future resale in the public market and result in substantial dilution to our stockholders.

As of February 28, 2025, we have issued pre-funded warrants to purchase a total of 8,315,020 shares of our common stock, of which 7,577,909 were outstanding as of February 28, 2025.

As of May 31, 2025, we have issued pre-funded warrants to purchase a total of 8,315,020 shares of our common stock, of which 7,577,909 were outstanding as of May 31, 2025.

Each pre-funded warrant is exercisable for $0.001 per share of common stock underlying such pre-funded warrant, which may be paid by way of a cashless exercise, meaning that the holder may not pay a cash purchase price upon exercise, but instead would receive upon such exercise the net number of shares of common stock determined according to the formula set forth in the pre-funded warrant.

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We no longer qualify as a “ smaller reporting company ” and we may no longer take advantage of the reduced disclosure and reporting requirements applicable to smaller reporting companies.

Based on the market value of our common stock held by our non-affiliates as of May 31, 2024, we no longer qualify as a “smaller reporting company” as defined by the SEC effective November 30, 2024.

Therefore, beginning with this quarterly report on Form 10-Q for the fiscal quarter ending February 28, 2025, we are no longer be eligible to rely on the reduced disclosure and reporting requirements applicable to smaller reporting companies.

Moreover, we chose not to take advantage of the reduced disclosure and reporting requirements applicable to smaller reporting companies starting with our Annual Report on Form 10-K for the fiscal year ended November 30, 2024.

Based on the market value of our common stock held by our non-affiliates as of May 31, 2024, effective November 30, 2024, we no longer qualify as a “smaller reporting company” as defined by the SEC .

Accordingly, beginning with our quarterly report on Form 10-Q for the fiscal quarter ended February 28, 2025, we were no longer eligible to rely on the reduced disclosure and reporting requirements applicable to smaller reporting companies.

Any failure to comply with the increased disclosure and reporting requirements could have an adverse effect on our business, financial condition and results of operations.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1A. Risk Factors