What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2025-03-13 compared with 2024-03-12 · 210 added, 128 removed, 616 unchanged (35% of the section changed)

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(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and disposition of assets;

reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S.

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S.

GAAP, and that receipts and expenditures are being made only in accordance with the authorization of its management and directors;

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Other Information.

Director and Officer Trading Arrangements

During the fourth quarter of 2024, none of our directors or officers (as defined in Rule 16a-1(f) under the Exchange Act, as amended) entered into, modified (as to amount, price or timing of trades) or terminated (i) contracts, instructions or written plans for the purchase or sale of our securities that are intended to satisfy the conditions specified in Rule 10b5-1(c) under the Exchange Act for an affirmative defense against liability for trading in securities on the basis of material nonpublic information or (ii) non-Rule 10b5-1 trading arrangements (as defined in Item 408(c) of Regulation S-K).

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

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4.4 Description of Registrant’s Securities.

4.5 Registration Rights Agreement, dated April 10, 2024, by and between Rallybio Corporation and Johnson & Johnson Innovation - JJDC, Inc.

(incorporated by reference to Exhibit 4.1 to the Company’s Quarterly Report on Form 10-Q (File No.

001-40693), filed with the SEC on August 8, 2024).

10.1+ Asset Purchase Agreement, by and between Rallybio IPA, LLC and Prophylix AS, dated June 28, 2019 (incorporated by reference to Exhibit 10.1 to the Company’s Registration Statement on Form S-1 (File No.

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333-257655), as amended, filed with the SEC on July 22, 2021).

Subsidiaries of Registrant.

FNAIT Collaboration Agreement, dated April 9, 2024, by and between Momenta Pharmaceuticals, Inc.

and Rallybio IPA, LLC (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q (File No.

001-40693), filed with the SEC on August 8, 2024).

10.28 Sales Agreement, dated as of August 8, 2022, between Rallybio Corporation and TD Securities (USA) LLC (as successor to Cowen and Company, LLC) (incorporated by reference to Exhibit 1.2 to the Company’s Registration Statement on Form S-3 (File No.

333-266668), filed with the SEC on August 8, 2022).

Company Insider Trading Policy.

21.1 Subsidiaries of Registrant (incorporated by reference to Exhibit 21.1 to the Company’s Annual Report on Form 10-K (File No.

001-40693), filed with the SEC on March 12, 2024).

23.1* Consent of Deloitte & Touche LLP, independent registered public accounting firm.

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/s/ Martin W.

Executive Chairman

March 13, 2025

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Nash Director March 13, 2025

Parmar Director March 12, 2024

Parmar, M.D., Ph.D.

/s/ Paula Soteropoulos Director March 13, 2025

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Operating lease liabilities 154 219

Deferred revenue 848 —

Total current liabilities 6,242 9,263

Operating lease liabilities, noncurrent — 173

Deferred revenue, noncurrent 212 —

Total liabilities 6,454 9,436

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Common stock, $ 0.0001 par value per share;

200,000,000 shares authorized as of December 31, 2023 and 2022, respectively;

200,000,000 shares authorized as of December 31, 2024 and 2023;

and 41,510,163 and 37,829,565 shares issued and outstanding as of December 31, 2024 and 2023, respectively

Preferred stock, $ 0.0001 par value per share;

50,000,000 shares authorized as of December 31, 2023 and 2022, respectively;

no shares issued or outstanding as of December 31, 2023 and 2022, respectively

50,000,000 shares authorized as of December 31, 2024 and 2023;

no shares issued or outstanding as of December 31, 2024 and 2023

Additional paid-in capital 354,602 341,410

Accumulated other comprehensive gain (loss) 15 ( 214 )

Accumulated other comprehensive gain 68 15

Accumulated deficit ( 293,020 ) ( 235,245 )

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Total liabilities and stockholders' equity $ 68,108 $ 115,620

See accompanying notes of the consolidated financial statements

See accompanying notes to the consolidated financial statements

RALLYBIO CORPORATION

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(in thousands, except share and per share amounts) 2024 2023

Collaboration and license revenue $ 636 $ —

Total revenue 636 —

Operating expenses:

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Weighted-average common shares outstanding, basic and diluted 43,544,824 40,447,388

Other comprehensive gain (loss):

Net unrealized gain (loss) on marketable securities 229 ( 214 )

Other comprehensive gain (loss) 229 ( 214 )

Other comprehensive gain:

Net unrealized gain on marketable securities 53 229

Other comprehensive gain 53 229

Comprehensive loss $ ( 57,722 ) $ ( 74,335 )

See accompanying notes of the consolidated financial statements

See accompanying notes to the consolidated financial statements

RALLYBIO CORPORATION

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December 31, 2022 37,837,369 $ 4 $ 330,208 $ ( 160,681 ) $ ( 214 ) $ 169,317

Issuance of common stock and pre-funded warrants upon completion of the follow-on offering, net of underwriting discounts and commissions and offering costs of $ 3,976

5,803,655 1 50,845 — — 50,846

Issuance of common stock from the stock purchase plan 79,283 — 282 — — 282

Issuance of common stock from the stock award plan 11,219 — — — — —

Issuance of common stock from exercise of stock options 2,014 — 21 — — 21

Forfeiture of restricted common stock ( 98,306 ) — — — — —

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Net loss — — — ( 74,564 ) — ( 74,564 )

Other comprehensive gain (loss) — — — — ( 214 ) ( 214 )

Other comprehensive gain — — — — 229 229

Balance, December 31, 2023 37,829,565 $ 4 $ 341,410 $ ( 235,245 ) $ 15 $ 106,184

Issuance of common stock upon completion of a securities purchase agreement, net of offering costs of $ 268

3,636,363 $ — $ 5,137 $ — $ — $ 5,137

Issuance of common stock from the stock purchase plan 60,866 — 62 — — 62

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Net loss — — — ( 57,775 ) — ( 57,775 )

Other comprehensive gain (loss) — — — — 229 229

Other comprehensive gain — — — — 53 53

Balance, December 31, 2024 41,510,163 $ 4 $ 354,602 $ ( 293,020 ) $ 68 $ 61,654

See accompanying notes of the consolidated financial statements

See accompanying notes to the consolidated financial statements

RALLYBIO CORPORATION

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Net accretion of discounts/premiums on debt securities ( 1,612 ) ( 3,089 )

Stock-based compensation 10,920 9,499

Share-based compensation 7,993 10,920

Loss on investment in joint venture 2,239 2,041

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Accrued expenses and operating lease liabilities ( 3,344 ) ( 1,443 )

Deferred revenue 1,060 —

Net cash used in operating activities $ ( 49,282 ) $ ( 60,265 )

Cash Flows Provided by (Used in) Investing Activities:

Cash Flows Provided by Investing Activities:

Purchases of marketable securities ( 48,933 ) ( 108,414 )

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Investment in joint venture ( 2,000 ) ( 2,250 )

Net cash provided by (used in) investing activities $ 27,658 $ ( 112,170 )

Cash Flows Provided by (Used in) Financing Activities:

Proceeds from the issuance of common stock and pre-funded warrants upon the completion of the follow-on offering, net of underwriting discounts and commissions of $ 3,289

Net cash provided by investing activities $ 33,492 $ 27,658

Cash Flows Provided by Financing Activities:

Proceeds from the issuance of common stock from a securities purchase agreement 5,405 —

Proceeds from the issuance of common stock from the stock purchase plan 62 282

Proceeds from the issuance of common stock from exercise of stock options — 21

Payments of offering costs ( 268 ) ( 139 )

Net cash provided by (used in) financing activities $ 143 $ 51,078

Net cash provided by financing activities $ 5,199 $ 143

Net decrease in cash and cash equivalents ( 10,591 ) ( 32,464 )

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Cash and cash equivalents—end of year $ 13,903 $ 24,494

Supplemental Disclosures of Noncash Investing and Financing Activities:

Offering costs in accounts payable and accrued expenses $ — $ 139

See accompanying notes of the consolidated financial statements

See accompanying notes to the consolidated financial statements

RALLYBIO CORPORATION

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Rallybio Corporation and subsidiaries ("Rallybio", the "Company", "we", "our", or "us") is a clinical-stage biotechnology company comprised of experienced biopharma industry leaders with extensive research, development, and rare disease expertise with a mission to develop and commercialize life-transforming therapies for patients with severe and rare diseases.

Since our launch in January 2018, we have built a broad pipeline of promising product candidates aimed at addressing diseases with unmet medical need in the areas of maternal fetal health, complement dysregulation, hematology, and metabolic disorders.

Our two most advanced programs are in clinical development:

Since the Company's launch in January 2018, the Company has built a broad pipeline of promising product candidates aimed at addressing diseases with unmet medical need in the areas of maternal fetal health, complement dysregulation, hematology, and metabolic disorders.

The Company's two most advanced programs are in clinical development:

RLYB212, an anti-HPA-1a antibody for the prevention of fetal and neonatal alloimmune thrombocytopenia (“FNAIT”) and RLYB116, an inhibitor of complement component 5 (“C5”), with the potential to treat several diseases of complement dysregulation.

Both programs have completed Phase 1 clinical trials, and we currently plan to initiate a Phase 2 clinical trial of RLYB212 in the second half of 2024.

In August 2021, the Company completed its initial public offering ("IPO"), pursuant to which it issued and sold 7,130,000 shares of the Company’s common stock, inclusive of 930,000 shares sold pursuant to the full exercise of the underwriters’ option to purchase additional shares, at a public offering price of $ 13.00 per share.

The gross proceeds from the IPO, including the exercise of the underwriter's option to purchase additional shares were $ 92.7 million and the net proceeds were approximately $ 83.0 million, after deducting underwriting discounts and commissions and other offering costs.

In November 2022, the Company completed a follow-on offering of approximately $ 54.8 million consisting of 5,803,655 shares of common stock, inclusive of 803,654 shares of common stock sold pursuant to the partial exercise of the underwriters' option to purchase additional shares at the price of $ 6.00 per share and to certain investors in lieu of common stock, pre-funded warrants to purchase up to an aggregate of 3,333,388 shares of common stock at a price of $ 5.9999 , which represents the per share public offering price for the shares less the $ 0.0001 per share exercise price for each pre-funded warrant.

The net proceeds from the November 2022 follow-on offering were approximately $ 50.8 million, after deducting underwriting discounts and commissions and other offering costs.

RLYB212 is currently in a Phase 2 clinical trial in pregnant women and the Company plans to initiate a confirmatory pharmacokinetics (“PK”) and pharmacodynamics ("PD") study of RLYB116 in the second quarter of 2025.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION

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While management believes that estimates and assumptions used in the preparation of the consolidated financial statements are appropriate, actual results could differ from those estimates.

The most significant estimates are those used in the determination of the fair value of its common units and incentive units awarded to employees prior to the Company's IPO, for purposes of recording stock-based incentive compensation, the fair value of stock options, as well as contracted research and development expenses incurred.

The most significant estimates are those used in the determination of the fair value of its common units and incentive units awarded to employees prior to the Company's initial public offering ("IPO"), for purposes of recording share-based incentive compensation, the fair value of stock options, as well as contracted research and development expenses incurred.

Liquidity and Ability to Continue as a Going Concern —The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

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During the years ended December 31, 2024 and 2023, the Company incurred a net loss of $ 57.8 million and $ 74.6 million, respectively.

In addition, as of December 31, 2023, the Company had an accumulated deficit of

$ 235.2 million.

In addition, as of December 31, 2024, the Company had an accumulated deficit of $ 293.0 million.

The Company expects to continue to generate operating losses and negative cash flows in the foreseeable future.

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The Company classifies payments owed or receivables recorded as other current liabilities and other current assets, respectively, in the Company’s consolidated balance sheets.

See Note 3, “License and Collaboration Agreements” for additional details.

See Note 3, “Collaboration and License Agreements” for additional details.

Asset Acquisitions —The Company evaluates acquisitions of assets and other similar transactions to assess whether or not the transaction should be accounted for as a business combination or asset acquisition by first applying a screen test to determine whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets.

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In an asset acquisition, the cost allocated to acquire in-process research and development ("IPR&D") with no alternative future use is charged to research and development expense at the acquisition date.

See Note 3, “License and Collaboration Agreements” for additional details.

See Note 3, “Collaboration and License Agreements” for additional details.

Variable Interest Entity —The Company evaluates its ownership, contractual, and other interests in entities to determine if it has any variable interest in a variable interest entity (“VIE”).

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Changes in consolidation status are applied prospectively.

The Company evaluated its investment in RE Ventures I, LLC, a limited liability company (“REV-I”), defined in Note 9, and concluded that it represented a VIE and was not deemed the primary beneficiary.

The Company evaluated its investment in RE Ventures I, LLC, a limited liability company (“REV-I”), defined in Note 9, and concluded that it represented a VIE and the Company was not deemed the primary beneficiary.

If the Company is not deemed to be the primary beneficiary in a VIE, the Company accounts for the investment or other variable interests in a VIE in accordance with the applicable GAAP.

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Equity Method Investments —The Company accounts for investments for which it does not have a controlling interest in accordance with ASC 323, Investments – Equity Method and Joint Ventures ("ASC 323").

Company recognizes its pro-rata share of income and losses in “loss on investment in joint venture” on the consolidated statements of operations and comprehensive loss, with a corresponding change to the investment in joint venture asset on the consolidated balance sheets.

The Company recognizes its pro-rata share of income and losses in “loss on investment in joint venture” on the consolidated statements of operations and comprehensive loss, with a corresponding change to the investment in joint venture asset on the consolidated balance sheets.

Financial Instruments —The Company’s principal financial instruments are comprised of cash, cash equivalents, available for sale marketable securities, accounts payable and accrued liabilities.

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The Company invests its excess cash in money market funds and marketable securities in government insured financial institutions that are subject to minimal credit and market risk.

Management believes that the Company is not exposed to significant credit risk as the Company’s deposits are held at financial institutions that management believes to be of high credit quality, and the Company has not experienced any losses on these deposits.

Management believes that the Company is not

exposed to significant credit risk as the Company’s deposits are held at financial institutions that management believes to be of high credit quality, and the Company has not experienced any losses on these deposits.

Cash and Cash Equivalents —The Company classifies amounts on deposit in banks and cash invested temporarily in various instruments, primarily money market funds, with original maturities of three months or less at the time of purchase as cash and cash equivalents.

The carrying amounts reported in the consolidated balance sheets represent the fair values of cash and cash equivalents.

The carrying amounts reported on the consolidated balance sheets represent the fair values of cash and cash equivalents.

Marketable Securities —We invest our excess cash balances in highly rated United States ("U.S.") government-backed debt securities and treasuries.

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Debt securities with original maturities of greater than 90 days are classified as available-for-sale marketable securities and debt securities with original maturities of less than 90 days from the date of purchase are classified as cash equivalents.

Unrealized gains and losses on our marketable debt securities that are deemed temporary are included in accumulated other comprehensive income (loss) as a separate component of stockholders’ equity.

Unrealized gains and losses on our marketable debt securities that are deemed temporary are included in accumulated other comprehensive gain (loss) as a separate component of stockholders’ equity.

If any adjustment to fair value reflects a significant decline in the value of the security, we evaluate the extent to which the decline is determined to be other-than-temporary and would mark the security to market through a charge to our consolidated statements of operations and comprehensive loss.

Credit losses are identified when we do not expect to receive cash flows sufficient to recover the amortized cost basis of a security.

In the event of a credit loss, only the amount associated with the credit loss is recognized in operating results, with the amount of loss relating to other factors recorded in accumulated other comprehensive income (loss).

Property and Equipment —Property and equipment are recorded at cost and consist of computer and other equipment, capitalized software, furniture and fixtures and leasehold improvements.

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Lease classification, recognition, and measurement are then determined at the lease commencement date.

For arrangements that contain a lease we (i) identify lease and non-lease components, (ii) determine the consideration in the contract, (iii) determine whether the

lease is an operating or financing lease;

For arrangements that contain a lease we (i) identify lease and non-lease components, (ii) determine the consideration in the contract, (iii) determine whether the lease is an operating or financing lease;

and iv) recognize lease right-of-use ("ROU") assets and liabilities.

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Fixed, or in substance fixed, lease payments on operating leases are recognized over the expected term of the lease on a straight-line basis.

Variable lease expenses that are not considered fixed, or in substance fixed, are recognized as incurred.

Variable lease expenses that are not considered fixed, or in substance

fixed, are recognized as incurred.

Fixed and variable lease expense on operating leases is recognized within operating expenses within our consolidated statements of operations and comprehensive loss.

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Deferred offering costs are included in prepaid expenses and other assets on the consolidated balance sheets.

Deferred offering costs as of December 31, 2022 were $ 0.1 million.

There were no deferred offering costs as of December 31, 2023.

There were no deferred offering costs as of December 31, 2024 and 2023.

Stock Warrants —The Company accounts for stock warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance included in ASC 480, Distinguishing Liabilities from Equity ("ASC 480") and ASC 815, Derivatives and Hedging ("ASC 815").

The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, whether the warrants meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815.

This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent

quarterly period end date while the warrants are outstanding.

This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

Warrants that meet all of the criteria for equity classification are required to be recorded as a component of additional paid-in capital at the time of issuance.

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Generally, share-based compensation is measured at the grant date for all equity-based awards made to employees based on the fair value of the awards and is recognized over the requisite service period, which is generally the vesting period.

Share-based compensation for awards with performance conditions are recognized over the service period when achievement of the performance condition is probable.

Share-based compensation for awards with performance conditions are recognized over the service period when achievement of the

performance condition is probable.

The Company has elected to recognize the actual forfeitures by reducing the share-based compensation in the same period as the forfeitures occur.

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Black-Scholes requires inputs based on certain subjective assumptions, including the expected stock price volatility, the expected term of the award, the risk-free interest rate and expected dividends.

Due to the lack of a public market for the Company’s common stock and lack of company-specific historical and implied volatility data, the Company has based its computation of expected volatility on the historical volatility of a representative group of public companies with similar characteristics to the Company.

The historical volatility is calculated based on a period of time corresponding with expected term assumption.

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In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible, as well as considers counterparty credit risk in its assessment of fair value.

Segment Information —Operating segments are defined as components of an enterprise for which discrete financial information is regularly reviewed by the chief operating decision maker in deciding how to allocate

resources and in assessing operating performance.

The Company manages its operations as a single segment for the purposes of allocating resources, assessing performance, and making operating decisions.

All tangible assets of the Company are held in the U.S.

See Note 12, “Segments” for additional details.

Basic and Diluted Net Loss Per Share —The Company calculates basic net loss per share by dividing the net loss by the weighted-average number of common shares outstanding during the period, without consideration of potential dilutive securities.

Basic shares outstanding includes the weighted-average effect of the Company's pre-funded warrants to purchase shares of our common stock requiring little consideration upon exercise.

Unvested restricted common shares as of December 31, 2023 and 2022 are not considered participating securities and as such are excluded from the weighted-average number of shares used for calculating basic and diluted net loss per share.

Unvested restricted common shares as of December 31, 2024 and 2023 are not considered participating securities and as such are excluded from the weighted-average number of shares used for calculating basic

and diluted net loss per share.

Diluted net loss per share is computed by dividing the net loss by the sum of the weighted-average number of common shares outstanding during the period plus the dilutive effects of potentially dilutive securities outstanding during the period.

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The Company has generated a net loss for all periods presented, therefore diluted net loss per share is the same as basic net loss per share since the inclusion of potentially dilutive securities would be anti-dilutive.

Recently Adopted Accounting Pronouncements —In June 2016, the FASB issued ASC 2016-13 , Financial Instruments - Credit Losses ("ASC 2016-13"), a new standard intended to improve reporting requirements specific to loans, receivables and other financial instruments.

The new standard requires that credit losses on financial assets measured at amortized cost be determined using an expected loss model, instead of the current incurred loss model, and requires that credit losses related to available-for-sale debt securities be recorded through an allowance for credit losses and limited to the amount by which carrying value exceeds fair value.

We adopted the new standard on January 1, 2022 and have completed our assessment of the standard based on the composition of our portfolio of financial instruments.

Our significant financial assets that are within the scope of the new standard consist of available for sale debt securities.

There was no impact to our consolidated statements of operations and comprehensive loss or consolidated balance sheets upon adoption.

See Note 4 for discussion of unrealized losses on our available for sale marketable securities.

Recently Issued Accounting Pronouncements —In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Revenue Recognition —The Company recognizes revenue in accordance with the provisions of ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”).

The Company recognizes revenue when the Company’s customer obtains control of promised goods or services, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods and services.

To determine revenue recognition for arrangements within the scope of ASC 606, the Company performs the following five steps:

(i) identify the contract(s) with a customer;

(ii) identify the performance obligations in the contract;

(iii) determine the transaction price;

(iv) allocate the transaction price to the performance obligations in the contract;

and (v) recognize revenue when or as the Company satisfies a performance obligation.

The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration to which it is entitled in exchange for the goods or services it transfers to the customer.

The Company evaluates the promised goods or services in these agreements to determine which ones represent distinct performance obligations.

These agreements may include the following types of promised goods or services:

(i) grants of licenses and related transfer of know-how, (ii) performance of research and development services, and (iii) participation on joint research and/or development committees.

They also may include options to obtain further research and development services and licenses to the Company’s intellectual property.

The payment terms of these agreements may include nonrefundable upfront fees, payments based upon the achievement of certain milestones, and additional payments based on product sales derived from the collaboration.

The Company exercises judgment in assessing those promised goods and services that are distinct and thus representative of performance obligations.

To the extent the Company identifies multiple performance obligations in a contract or group of contracts signed together, the Company must develop assumptions that require judgment to determine the estimated standalone selling price for each performance obligation in order to allocate the transaction price among the identified performance obligations.

The transaction is allocated on a relative standalone selling price basis.

Prior to recognizing revenue, the Company makes estimates of the transaction price, including variable consideration that is subject to a constraint.

Amounts of variable consideration are included in the transaction price to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur and when the uncertainty associated with the variable consideration is subsequently resolved.

These estimates are reassessed at each reporting period as required.

The Company then recognizes revenue in the amount of the transaction price that is allocated to the respective performance obligations when or as the performance obligations are satisfied.

For performance obligations satisfied over time, the Company estimates the efforts needed to complete the performance obligations and recognizes revenue over the satisfaction of the performance obligations.

Restructuring —The Company accounts for restructuring charges in accordance with ASC Subtopic 420-10, Exit or Disposal Cost Obligations .

The charges related to the workforce reduction are cash-based expenditures related primarily to severance and benefit payments, with such amounts reflected in the Company's consolidated statements of operations and other comprehensive loss.

See Note 13, “Restructuring” for additional details.

Recently Adopted Accounting Pronouncements —In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures ("ASU 2023-07").

This ASU requires disclosures of significant segment expenses and other segment items as well as incremental qualitative disclosures.

The amendments in ASU 2023-07 apply to public entities, including those with a single reportable segment.

The amendments in ASU 2023-07 apply to public business entities, including those with a single reportable segment.

This ASU is effective for all public companies for fiscal years beginning after December 15, 2023, and for interim periods beginning December 15, 2024.

The Company may choose to early adopt any new or revised accounting standards whenever such early adoption is permitted.

The company has chosen not to early adopt this standard and is currently evaluating the potential impact of adopting this standard on its consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

The Company adopted ASU 2023-07 during the year ended December 31, 2024.

See Note 12, "Segments" for additional detail.

Recently Issued Accounting Pronouncements —In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures ("ASU 2023-09") which establishes new income tax disclosure requirements in addition to modifying and eliminating certain existing requirements.

Public business entities must apply the ASU’s guidance to annual periods beginning after December 15, 2024.

business entities must apply the ASU’s guidance to annual periods beginning after December 15, 2024.

The company has chosen not to early adopt this standard and is currently evaluating the potential impact of adopting this standard on its consolidated financial statements.

LICENSE AND COLLABORATION AGREEMENTS

In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses ( "ASU 2024-03").

This ASU requires public entities to disclose additional transparency on certain costs and expenses.

ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027.

Early adoption is permitted.

The company has chosen not to early adopt this standard and is currently evaluating the potential impact of adopting this standard on its consolidated financial statements.

COLLABORATION AND LICENSE AGREEMENTS

Johnson & Johnson Collaboration

In April 2024, the Company entered into a two-year collaboration agreement (the "J&J Collaboration Agreement") with Johnson & Johnson, through its wholly-owned subsidiary, Momenta Pharmaceuticals, Inc.

(“J&J”) to facilitate the advancement of research into products to address unmet needs relating to FNAIT.

The Company has an ongoing multinational FNAIT natural history study to determine the frequency of women at higher FNAIT risk among pregnant women of different racial and ethnic characteristics, as well as the frequency of HPA-1a alloimmunization and pregnancy outcomes among these women.

In this study, participants are screened to determine whether they are HPA-1a negative, positive for HLA-DRB3*01:01 and for the absence of HPA-1a alloantibodies.

Subject to the results of the initial screenings, a final screening may be conducted to detect whether the fetus is HPA-1a positive.

In addition, the Company is a sponsor of an ongoing Phase 2 FNAIT clinical trial that will include collection of certain natural history data.

Pursuant to the J&J Collaboration Agreement, the Company received an upfront payment of $ 0.5 million from J&J for the information dissemination and data provision services under the agreement.

In addition, the Company is eligible for payments upon the achievement of certain enrollment-related events, totaling up to $ 0.7 million.

The Company is also eligible to receive additional payments upon certain triggers related to the companies' FNAIT studies.

The Company evaluated the agreement and determined it was within the scope of ASC 606.

The Company determined there were performance obligations as follows:

(1) Data collection & submission revenue – derived from Rallybio’s ongoing management of the studies including the maintenance of a minimum site footprint, the license to utilize, and timely, semi-annual submission of the anonymized data, in the required formats.

(2) Dissemination of J&J materials & participant revenue – derived from Rallybio’s dissemination of content, information or materials related to the J&J-Sponsored Studies that are developed by J&J and are provided by Rallybio for the purpose of disseminating such content, information, or materials to staff at Rallybio study sites to provide to potential eligible participants regarding J&J’s independent study.

In April 2024, the Company also entered into a securities purchase agreement (the "JJDC Securities Purchase Agreement") with Johnson & Johnson Innovation – JJDC, Inc.

Under the terms of the JJDC Securities Purchase Agreement, JJDC made an equity investment purchasing 3,636,363 shares of common stock with a par value of $ 0.0001 per share for a share purchase price of $ 1.82 per share which includes a 10 % premium for an aggregate purchase price of $ 6.6 million.

The JJDC Securities Purchase Agreement contains provisions related to the registration of the shares and the restriction on the sale or transfer of the shares for a period of time.

The Company determined the J&J Collaboration Agreement and the JJDC Securities Purchase Agreement represented combined agreements.

In accordance with ASC 606 and ASC 820, total consideration of $ 1.2 million for the shares of common stock from the JJDC Securities Purchase Agreement, which represents the premium of $ 0.7 million and discount for lack of marketability of $ 0.5 million, has been allocated to revenue and will be recognized over the two year expected performance period.

The Company valued the common stock issued to JJDC, in connection with the JJDC Securities Purchase Agreement at fair value.

The resulting fair value of $ 5.4 million was determined by applying the discount due to lack of marketability during the registration and lock-up period to the public trading price of the common stock, which is a Level 1 input, on the date of sale.

The Company determined the value of the lack of marketability

during the registration and lock-up period by utilizing put option models, which are considered Level 3 inputs.

Such option models included the Company’s historical volatility of 113.2 % and the risk-free rate of 5.28 % based on U.S.

Treasury bond rates, as key inputs.

The Company recognized $ 0.6 million, respectively, in revenue during the year ended December 31, 2024, related to data collection and data submission with the identified performance obligations, and the premium and discount allocated to revenue from the sale of the common stock to JJDC.

The remaining revenue is included in deferred revenue as of December 31, 2024, and will be recognized as the performance obligations are satisfied.

The Company determined that the J&J Collaboration Agreement is not in the scope of ASC 808.

Asset Acquisition

In May 2022, we obtained worldwide exclusive rights to RLYB331, with Kymab Limited ("Sanofi") a preclinical antibody.

In 2024, we re-engineered RLYB331 to extend its half-life and renamed the program RLYB332.

We believe RLYB332 has the potential to address a significant unmet need for patients with severe anemias with ineffective erythropoiesis and iron overload, including beta thalassemia and a subset of lower risk myelodysplastic syndromes.

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The license was accounted for as an asset acquisition as substantially all of the fair value of the asset acquired was concentrated in a single asset and thus the acquisition was deemed not to be a business combination.

acquired license rights represent an IPR&D asset that was determined to have no alternative future use.

Accordingly, the Company recorded an IPR&D charge of $ 3.1 million to research and development expense, including transaction costs associated with this asset acquisition of $ 0.1 million, in the accompanying consolidated statements of operations and comprehensive loss for the year ended December 31, 2022.

The Company did no t record an IPR&D charge for the year ended December 31, 2023.

The acquired license rights represent an IPR&D asset that was determined to have no alternative future use.

Accordingly, the Company recorded an IPR&D charge of $ 3.1 million to research and development expense, including transaction costs associated with this asset acquisition of $ 0.1 million, in the consolidated statements of operations and comprehensive loss for the year ended December 31, 2022.

The Company did not record an IPR&D charge for the years ending December 31, 2024 and 2023 and did not achieve any milestones related to the terms of the license agreement.

AbCellera Collaboration

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Payments due because of the co-development will be recorded as research and development expense in the period such expenses are incurred and for payments owed to us from our collaboration partner for the reimbursement of research and development costs will be recorded as a contra-research and development expense in the period such expenses are incurred.

Costs related to the AbCellera collaboration were $ 0.9 million for the year ended December 31, 2023.

Costs related to the AbCellera collaboration were not material for the year ended December 31, 2022.

Costs related to the AbCellera collaboration were $ 0.4 million and $ 0.9 million for the years ended December 31, 2024 and 2023, respectively.

MARKETABLE SECURITIES

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$ 101,948 $ 79 $ ( 64 ) $ 101,963

The fair values of marketable securities by classification in the consolidated balance sheets as of December 31, 2023 and 2022 was as follows:

The fair values of marketable securities by classification on the consolidated balance sheets as of December 31, 2024 and 2023 was as follows:

(in thousands) DECEMBER 31, 2024 DECEMBER 31, 2023

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No allowance for credit losses was recorded as of December 31, 2024 and 2023.

We have operating leases for approximately nine thousand square feet of corporate office space.

The weighted-average remaining lease term as of December 31, 2023 was 1.8 years.

We have an operating lease for approximately nine thousand square feet of corporate office space.

The weighted-average remaining lease term as of December 31, 2024 was 9 months.

The weighted-average discount rate utilized on our operating lease liabilities as of December 31, 2024 was 4.00 %.

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Carrying value of operating lease liabilities $ 154

The Company incurred $ 0.2 million in operating lease rent expense for both the years ended December 31, 2023 and 2022, respectively.

Lease payments made were $ 0.2 million for both the years ended December 31, 2023 and 2022, respectively, with such amounts reflected in the consolidated statements of cash flows in operating activities.

The Company incurred $ 0.2 million in operating lease rent expense for both years ended December 31, 2024 and 2023.

Lease payments made were $ 0.3 million and $ 0.2 million for the years ended December 31, 2024 and 2023, respectively, with such amounts reflected on the consolidated statements of cash flows in operating activities.

BALANCE SHEET COMPONENTS

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Leasehold improvements 338 338

Less accumulated depreciation ( 523 ) ( 373 )

Property and equipment—net $ 246 $ 385

Depreciation expense totaled $ 0.1 million and $ 0.2 million for the years ended December 31, 2023 and 2022, respectively.

Total property and equipment 769 769

accumulated depreciation ( 654 ) ( 523 )

Total property and equipment—net $ 115 $ 246

Depreciation expense totaled $ 0.1 million for both years ended December 31, 2024 and 2023.

Prepaid Expenses and Other Assets—

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Other prepaids 214 293

Other assets 2,054 1,050

Other current assets 995 2,054

$ 2,330 $ 4,860

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STOCKHOLDERS' EQUITY

In August 2021, the Company completed its IPO, pursuant to which it issued and sold 7,130,000 shares of the Company’s common stock, inclusive of 930,000 shares sold pursuant to the full exercise of the underwriters’ option to purchase additional shares, at a public offering price of $ 13.00 per share.

The net proceeds from the November 2022 follow-on offering were approximately $ 50.8 million, after deducting underwriting discounts and commissions and other offering costs.

The Company had 200,000,000 shares of common stock authorized as of December 31, 2023 and 2022, respectively, of which 37,829,565 and 37,837,369 shares were issued and outstanding as of December 31, 2023 and 2022, respectively.

In April 2024, the Company entered into the JJDC Securities Purchase Agreement, pursuant to which the Company sold to JJDC, in an unregistered offering, 3,636,363 shares of its common stock, at a price of $ 1.82 per share, which represents a 10 % premium on the Company’s closing stock price on April 9, 2024, for aggregate gross proceeds of approximately $ 6.6 million, before deducting offering expenses.

The Company had 200,000,000 shares of common stock authorized as of December 31, 2024 and 2023, of which 41,510,163 and 37,829,565 shares were issued and outstanding as of December 31, 2024 and 2023, respectively.

Preferred Stock

The Company had 50,000,000 shares of preferred stock authorized as of December 31, 2023 and 2022, respectively, of which no shares were outstanding as of December 31, 2023 and 2022, respectively.

The Company had 50,000,000 shares of preferred stock authorized as of December 31, 2024 and 2023, of which no shares were outstanding as of December 31, 2024 and 2023.

Pre-Funded Warrants

In connection with the November 2022 follow-on offering, the Company entered into an agreement with certain investors for pre-funded warrants in lieu of common stock to purchase up to an aggregate of 3,333,388 shares of common stock at a price of $ 5.9999 , which represents the per share public offering price at the November 2022 follow-on offering for common stock less a $ 0.0001 per share exercise price for each pre-funded warrant.

percentage may be increased or decreased at the holder’s election upon 61 days’ notice to the Company subject to the terms of such pre-funded warrants, provided that such percentage may in no event exceed 19.99 %.

The Company may not effect the exercise of any pre-funded warrant, and a holder will not be entitled to exercise any portion of any pre-funded warrant if, upon giving effect to such exercise, the aggregate number of shares of common stock beneficially owned by the holder (together with its affiliates) would exceed 9.99 % of the number of shares of common stock outstanding immediately after giving effect to the exercise, which percentage may be increased or decreased at the holder’s election upon 61 days’ notice to the Company subject to the terms of such pre-funded warrants, provided that such percentage may in no event exceed 19.99 %.

The Company's pre-funded warrant is a freestanding instrument that does not meet the definition of a liability pursuant to ASC 480 and does not meet the definition of a derivative pursuant to ASC 815.

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Using the Black-Scholes option pricing model, the weighted-average grant date fair value of stock options granted during the years ended December 31, 2024 and 2023 was $ 1.47 per share and $ 4.93 per share, respectively.

Options vested during the years ended December 31, 2023 and 2022 with an exercise price above

the closing price are considered to have no intrinsic value.

Options vested during the years ended December 31, 2024 and 2023 with an exercise price above the closing price are considered to have no intrinsic value.

As of December 31, 2024, there was unrecognized share-based compensation expense related to unvested stock options of $ 7.8 million, which the Company expects to recognize over a weighted-average period of approximately 1.9 years.

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The share pool will automatically increase on January 1st of each year from 2022 to 2031 by the lesser of (i) one percent of the number of shares of the Company's common stock outstanding as of such date (ii) 582,648 shares of the Company's common stock, and (iii) the number of shares of the Company's common stock determined by the board of directors on or prior to such date.

On January 1, 2023 and January 1, 2022, the 2021 ESPP share pool was automatically increased by 378,373 and 321,309 shares, respectively.

As of December 31, 2023, the total number of shares of the Company's common stock that

were available for future issuance under the 2021 ESPP was 872,878 shares.

The 2021 ESPP share pool did not increase on January 1, 2024.

On January 1, 2023, the 2021 ESPP share pool was automatically increased by 378,373 shares.

As of December 31, 2024, the total number of shares of the Company's common stock that were available for future issuance under the 2021 ESPP was 812,012 shares.

During the years ended December 31, 2024 and 2023, the Company issued 60,866 and 79,283 shares, respectively, of the Company's common stock under the 2021 ESPP.

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For the years ended December 31, 2024 and 2023, the total share-based compensation for the 2021 ESPP was $ 0.1 million and $ 0.2 million, respectively.

During each of the years ended December 31, 2023 and 2022 , the Company did not record any income tax benefits.

The Company’s effective income tax rates are different from the federal statutory tax rates in 2023 and 2022 predominantly due to the valuation allowance, tax credits, and state taxes described below:

federal statutory tax rate 21.0 % 21.0 %

During each of the years ended December 31, 2024 and 2023, the Company did not record any income tax expense or benefits.

The Company’s effective income tax rates are different from the federal statutory tax rates in 2024 and 2023 predominantly due to the valuation allowance, tax credits, and state taxes.

A reconciliation of the effect of applying the federal statutory rate to the net loss and effective income tax rate are as follows:

federal statutory income tax rate 21.0 % 21.0 %

State income taxes, net of federal income tax benefit 5.4 % 7.8 %

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Valuation allowance ( 34.2 ) % ( 37.6 ) %

Effective tax rate 0.0 % 0.0 %

Effective income tax rate 0.0 % 0.0 %

Deferred income taxes represent the tax effect of transactions that are reported in different periods for financial and tax reporting purposes.

The combined temporary differences and carryforwards of each tax paying component of the Company that give rise to a significant portion of the deferred income tax benefits and liabilities are as follows at December 31, 2024 and 2023:

(in thousands) 2024 2023

Net operating loss carryforwards $ 45,973 $ 37,230

Amortization - non-174 intangibles 2,167 2,306

Intangible amortization 1,341 2,167

Section 174 capitalization 22,479 17,530

Research and development credits 17,729 10,242

Stock-based compensation 2,706 616

Research and development tax credits 24,047 17,729

Share-based compensation 2,654 2,706

Other 1,476 917

Total deferred tax assets 78,279 50,215

Less valuation allowance ( 78,279 ) ( 50,215 )

Gross deferred tax assets 97,970 78,279

Valuation allowance ( 97,970 ) ( 78,279 )

Net deferred tax assets $ — $ —

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In general, an ownership change, as defined by Section 382 of the Code, results from transactions increasing the ownership of certain stockholders or public groups in the stock of a corporation by more than 5% over a three-year period.

The Company recently completed a Section 382 study and concluded that we underwent an ownership change as defined by the Code during the year ended December 31, 2021.

The Company completed a Section 382 study and concluded that we underwent an ownership change as defined by the Code during the year ended December 31, 2021.

We do not currently believe that the annual limitation will result in the expiration of any net operating losses or research and development tax credit carryforwards before utilization.

Future ownership changes may limit our ability to utilize remaining tax attributes.

Additional ownership changes which may have occurred after December 31, 2021 and any future ownership changes may limit our ability to utilize remaining tax attributes.

Any carryforwards that will expire prior to utilization as a result of such additional limitations will be removed from deferred tax assets, with a corresponding reduction of the valuation allowance.

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There are no federal or state and local income tax returns currently under examination.

As of December 31, 2023, the statute remains open for returns filed for the tax years ended:

December 31, 2018;

December 31, 2019;

December 31, 2020;

June 30, 2021;

December 31, 2021;

and December 31, 2022.

As of December 31, 2024, the statute remains open for years 2018 through 2024.

These years are still considered open due to the Company generating net operating losses, as carryforward attributes generated in years past may still be adjusted upon examination by the Internal Revenue Service or other authorities if they have or will be used in a future period.

INVESTMENT IN JOINT VENTURE

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The Company did not provide any additional financial support outside of capital contributions to REV-I during the years ended December 31, 2024 and 2023.

However, in connection with the joint venture, the Company provides certain scientific and finance and accounting related support which was reimbursed by REV-I to the Company and included in other income on the consolidated statements of operations and comprehensive loss.

For the years ended December 31, 2024 and 2023, the Company recorded $ 0.7 million and $ 0.3 million, respectively, related to such support.

While the Company held a 50 % interest in the joint venture as of December 31, 2024, based on management’s analysis, the Company is not the primary beneficiary of REV-I and accordingly, the entity is not consolidated in the Company's consolidated financial statements.

For the years ended December 31, 2023 and 2022, the Company recorded its allocable share of REV-I’s losses, which totaled $ 2.0 million and $ 1.1 million, respectively, as a loss on investment in joint venture within the consolidated statements of operations and comprehensive loss.

After recognition of its share of losses for the period, the carrying value and maximum exposure to risk of the REV-I investment as of December 31, 2023 and December 31, 2022 was $ 0.2 million and $ 30 thousand, respectively, which was recorded in investment in joint venture in the accompanying consolidated balance sheets.

For the years ended December 31, 2024 and 2023, the Company recorded its allocable share of REV-I’s losses, which totaled $ 2.2 million and $ 2.0 million, respectively, as a loss on investment in joint venture in the consolidated statements of operations and comprehensive loss.

After recognition of its share of losses for the period, the carrying value and maximum exposure to risk of the REV-I investment as of December 31, 2023 was $ 0.2 million, which was recorded in investment in joint venture on the consolidated balance sheets.

no carrying value remaining of the REV-I investment as of December 31, 2024.

During the period subsequent to December 31, 2024 and through the date of these consolidated financial statements, the Company funded the joint venture an additional $ 1.0 million.

COMMITMENTS AND CONTINGENCIES

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These contracts generally do not contain minimum purchase commitments and are cancellable by us upon written notice.

Payments that may be due upon cancellation consist of payments for services provided or

expenses incurred prior to cancellation.

Payments that may be due upon cancellation consist of payments for services provided or expenses incurred prior to cancellation.

As of December 31, 2024 and 2023 there were no amounts accrued related to termination charges.

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The weighted-average number of common shares outstanding diluted for the years ended December 31, 2024 and 2023 excludes approximately 5.3 million and 4.8 million stock options and unvested restricted stock awards and units, respectively, which were not dilutive.

SUBSEQUENT EVENTS

On February 6, 2024, the Company announced a prioritization of its portfolio and a workforce reduction to focus resources on its Phase 2-ready clinical stage programs, RLYB212 and RLYB116.

The Company defines its segments on the basis of the way in which internally reported financial information is regularly reviewed by the CODM to analyze financial performance, make decisions, and allocate resources.

The Company’s CODM consists of its Chief Executive Officer, Chief Financial Officer and Chief Medical Officer.

The Company manages its operations as a single operating and reportable segment and the measure of segment profit or loss is net loss and comprehensive loss.

The CODM uses net loss in the budget and forecasting process and considers budget-to-actual variances on a quarterly basis when making decisions about the allocation of operating and capital resources.

The following table summarizes the information about reported segment revenues and significant segment expenses presented on the Company's consolidated statements of operations and comprehensive loss:

FOR THE YEAR ENDED

(in thousands) 2024 2023

Revenue $ 636 $ —

Research and development:

RLYB212 21,287 25,685

RLYB116 4,841 8,791

Other program candidates 1,901 3,411

Personnel expenses (including share-based compensation) 12,488 14,160

Other expenses 990 1,497

Total research and development 41,507 53,544

General and administrative, excluding personnel expenses 6,654 10,313

General and administrative, personnel expenses (including share-based compensation) 12,971 15,075

Other segment items* ( 2,721 ) ( 4,368 )

Segment net loss $ ( 57,775 ) $ ( 74,564 )

*Other segment items includes total other income, net and loss on investment in joint venture.

RESTRUCTURING

In February, 2024, the Company announced a prioritization of its portfolio and a workforce reduction to focus resources primarily on the continued development of RLYB212.

As part of this effort, the Company eliminated approximately 45 % of its positions.

As a result of these actions, the Company expects to incur charges of approximately $ 3.3 million, excluding share-based compensation expense.

The charges related to the workforce reduction are cash-based expenditures related primarily to one-time severance and benefit payments.

The Company expects to recognize substantially all charges related to the workforce reduction in the quarter ending March 31, 2024.

These estimates are subject to assumptions and actual results may differ.

As a result of these actions, the Company incurred charges of approximately $ 3.3 million of which $ 2.0 million was included in research and development expenses and $ 1.3 million was included in general and administrative expenses, with such amounts reflected in the consolidated statements of operations and comprehensive loss.

The charges related to the workforce reduction are cash-based expenditures related primarily to severance and benefit payments.

The Company recognized all such charges in the first quarter of 2024, with such amounts reflected in the consolidated statements of operations and comprehensive loss.

The accrued restructuring liability is included in accrued expenses on the consolidated balance sheets as of December 31, 2024.

Substantially all restructuring payments are expected to be completed by September 30, 2025.

The following table summarizes the restructuring accrued expense activity as of December 31, 2024:

(in thousands) DECEMBER 31,

Beginning accrued severance $ —

Severance incurred during the period 3,279

Severance paid and adjustments made during the period ( 3,076 )

Ending accrued severance $ 203

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-K

Item 9A. Controls and Procedures