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Item 1A. Risk Factors

2026-02-27 compared with 2025-03-06 · 345 added, 122 removed, 843 unchanged (36% of the section changed)

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The risks and uncertainties described below are not the only ones we face.

You should carefully consider the following factors and other information in this Annual Report on Form 10-K.

You should carefully consider the following factors and other information in this Annual Report.

If any of the negative events referred to below occur, our business, financial condition and results of operations could suffer.

In any such case, the trading price of our common stock could decline.

Risks Related to Development of Our Product Candidates

Our business is substantially dependent on the successful development of our BET inhibitor product candidates.

Our current development pipeline consists of our BET inhibitor product candidates, repibresib gel (VYN201) and VYN202, which we are developing for the treatment of immuno-inflammatory diseases.

The success of our business is dependent on our successful development and/or our ability to pursue strategic initiatives, including identifying and consummating transactions with third-party partners, to further develop, obtain marketing approval for and/or commercialize, these product candidates.

Our ability to successfully progress these candidates may be hampered for many reasons, including:

Risks Related to the Proposed Merger

Failure to complete, or delays in completing, the potential Merger with Yarrow could materially and adversely affect VYNE's results of operations, business, financial results and/or common stock price.

On December 17, 2025, VYNE entered into the Merger Agreement with Yarrow pursuant to which, among other matters, and subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement, Merger Sub will merge with and into Yarrow, with Yarrow continuing as a wholly owned subsidiary of VYNE and the surviving corporation of the Merger.

Consummation of the Merger is subject to certain closing conditions, a number of which are not within VYNE's control.

Any failure to satisfy these required conditions to closing may prevent, delay or otherwise materially adversely affect the completion of the transaction.

VYNE cannot predict with certainty whether or when any of the required closing conditions will be satisfied or if another uncertainty may arise and cannot assure you that VYNE will be able to successfully consummate the Merger as currently contemplated under the Merger Agreement or at all.

VYNE's efforts to complete the Merger could cause substantial disruptions in, and create uncertainty surrounding, VYNE's business, which may materially adversely affect VYNE's results of operation and business.

Uncertainty as to whether the Merger will be completed in a timely manner or at all may affect VYNE's ability to retain and motivate existing employees.

Uncertainty as to whether the Merger will be completed in a timely manner or at all could adversely affect VYNE's business and relationship with collaborators, suppliers, vendors, regulators and other business partners.

The adverse effects of the pendency of the transaction could be exacerbated by any delays in completion of the transaction or termination of the Merger Agreement.

If the conditions to the Merger are not satisfied or waived, the Merger may not occur.

Even if the Merger is approved by VYNE's stockholders and the stockholders of Yarrow, specified conditions must be satisfied or, to the extent permitted by applicable law, waived to complete the Merger.

These conditions are set forth in the Merger Agreement.

We cannot assure you that all of the conditions to the consummation of the Merger will be satisfied or waived.

If the conditions are not satisfied or waived, the Merger may not occur or the closing may be delayed.

VYNE and Yarrow may mutually agree to waive the condition to the Merger requiring approval for listing on Nasdaq Stock Market ("Nasdaq"), and if such condition is waived, the Combined Company’s stock may not be listed on Nasdaq following completion of the Merger.

Pursuant to the Merger Agreement, VYNE agreed, to the extent required by the rules and regulations of Nasdaq, to use commercially reasonable efforts to cause the shares of VYNE common stock being issued in the Merger to be approved for listing on Nasdaq at or prior to the Effective Time.

Additionally, under the Merger Agreement, each of VYNE’s and Yarrow’s obligation to complete the Merger is subject to the satisfaction or waiver by each of the parties of various conditions, including that the shares of VYNE common stock to be issued in the Merger have been approved for listing (subject to official notice of

issuance) on Nasdaq as of the closing of the Merger.

In the event that the shares of VYNE common stock to be issued in the Merger are not approved for listing on Nasdaq, it is possible (although not likely) that VYNE and Yarrow may mutually agree to waive the applicable condition and nonetheless proceed with completing the Merger.

If such condition is waived, VYNE will not recirculate an updated proxy statement/ prospectus, nor will VYNE solicit a new vote of stockholders prior to proceeding with the Merger.

If VYNE proceeds with the Merger in these circumstances, the Combined Company’s stock may not be listed on Nasdaq.

If the Combined Company’s stock is not listed on Nasdaq following completion of the Merger, trading of the shares could be conducted in the over-the-counter market or on an electronic bulletin board established for unlisted securities such as the Pink Sheets or the OTC Bulletin Board.

In such event, it is likely that there would be significantly less liquidity in the trading of the Combined Company common stock, decreases in institutional and other investor demand for the shares, a reduction in coverage by securities analysts, a decrease in market making activity and information available concerning trading prices and volume, and fewer broker dealers willing to execute trades in the Combined Company common stock.

Also, it may be difficult for the Combined Company to raise additional capital if the Combined Company common stock is not listed on a major exchange.

The occurrence of any of these events could result in a further decline in the market price of the Combined Company common stock and could have a material adverse effect on the Combined Company.

The Exchange Ratio for the Merger will not change or otherwise be adjusted based on the market price of VYNE common stock.

Applying the Exchange Ratio, based on Yarrow’s and VYNE's capitalization as of December 17, 2025 and taking into account VYNE's current cash position, (i) each then-outstanding share of Yarrow capital stock (including shares of Yarrow common stock issued in the Yarrow pre-closing financing), excluding any shares to be cancelled pursuant to the Merger Agreement and excluding dissenting shares, will be converted into the right to receive a number of shares of VYNE common stock and/or VYNE pre-funded warrants, as applicable, equal to 35.8667, (ii) each then-outstanding Yarrow option will be converted into

and become an option to purchase shares of VYNE common stock on the existing terms and conditions (including with respect to vesting and accelerated vesting), subject to adjustment as set forth in the Merger Agreement, and (iii) each then-outstanding and unexercised Yarrow Pre-Funded Warrant will be converted into a VYNE Pre-Funded Warrant, subject to adjustment as set forth in the Merger Agreement and the form of pre-funded warrant.

Applying the Exchange Ratio, the former Yarrow securityholders immediately before the Merger are expected to own approximately 97.0% of the aggregate number of shares of the Combined Company’s capital stock following the Merger (on a fully-diluted basis, and subject to dilution from any equity issued by Yarrow after December 17, 2025 and before the closing), and VYNE securityholders immediately before the Merger are expected to own approximately 3.0% of the aggregate number of shares of the Combined Company capital stock following the Merger (on a fully-diluted basis), subject to certain assumptions, including, but not limited to, that VYNE’s net cash as of Closing will be approximately $0, after giving effect to the cash dividend, which is expected to be approximately $14.5 to $16.5 million.

Any changes in the market price of VYNE common ctock before the completion of the Merger will not affect the number of shares Yarrow stockholders will be entitled to receive pursuant to the Merger Agreement.

Therefore, if before the completion of the Merger, the market price of VYNE common stock increases from the market price on the date of the Merger Agreement, then Yarrow stockholders could receive merger consideration with substantially more value for their shares of Yarrow Capital Stock than the parties had negotiated when they established the Exchange Ratio.

Similarly, if before the completion of the Merger, the market price of VYNE common stock declines from the market price on the date of the Merger Agreement, then Yarrow stockholders could receive merger consideration with substantially lower value.

The Merger Agreement does not include a price-based termination right.

The issuance of VYNE common stock, including the shares of our Common Stock issued in exchange for shares of Yarrow common stock issued in the Yarrow Pre-Closing Financing, to Yarrow stockholders pursuant to the Merger Agreement and the resulting change in control from the Merger must be approved by our stockholders, and the Merger Agreement and transactions contemplated thereby must be approved by the Yarrow stockholders.

Failure to obtain these approvals would prevent the closing of the Merger.

Before the Merger can be completed, our stockholders must approve, among other things, the issuance of VYNE common stock, including shares of Yarrow common stock issued in the Yarrow Pre-Closing Financing, to Yarrow stockholders pursuant to the Merger Agreement and the resulting change in control from the Merger, and Yarrow stockholders must adopt the Merger Agreement and approve the Merger and the related transactions.

Failure to obtain the required stockholder approvals may result in a material delay in, or the abandonment of, the Merger.

Any delay in completing the Merger may materially adversely affect the timing and benefits that are expected to be achieved from the Merger.

The Merger may be completed even though a material adverse effect may result from the announcement of the Merger, industry-wide changes or other causes.

In general, neither we nor Yarrow is obligated to complete the Merger if there is a material adverse effect affecting the other party between December 17, 2025, the date of the Merger Agreement, and the closing of the Merger.

However, certain types of causes are excluded from the concept of a “material adverse effect.” Such exclusions include, but are not limited to, changes in general economic or political conditions, industry-wide changes, changes resulting from the announcement of the Merger, natural disasters, pandemics, other public health events or force majeure events and changes in U.S.

generally accepted accounting principles.

Therefore, if any of these events were to occur and adversely affect us or Yarrow, the other party would still be obliged to consummate the closing of the Merger notwithstanding such material adverse effect.

If any such adverse effects occur and we consummate the closing of the Merger, the stock price of the Combined Company may suffer.

This in turn may reduce the value of the Merger to our stockholders, the stockholders of Yarrow or both.

If the Merger is not completed, VYNE's stock price may decline significantly.

The market price of VYNE common stock is subject to significant fluctuations.

Market prices for securities of pharmaceutical, biotechnology and other life science companies have historically been particularly volatile.

In addition, the market price of VYNE's common stock will likely be volatile based on whether stockholders and other investors believe that we can complete the Merger or otherwise raise additional capital to support our operations if the Merger is not consummated and another strategic transaction cannot be identified, negotiated and consummated in a timely manner, if at all.

The volatility of the market price of VYNE's common stock has been and may be exacerbated by low trading volume.

Additional factors that may cause the market price of VYNE common stock to fluctuate include:

• announcements of the results of our clinical trials, discussions with regulators, and regulatory approval decisions;

• the entry into, or termination of, key agreements, including commercial partner agreements;

• announcements by commercial partners or competitors of new commercial products, clinical progress or lack thereof, significant contracts, commercial relationships or capital commitments;

• the loss of key employees;

• future sales of VYNE common stock;

• general and industry-specific economic conditions that may affect our research and development expenditures;

• period-to-period fluctuations in financial results.

Moreover, the stock markets in general have experienced substantial volatility that has often been unrelated to the operating performance of individual companies.

These broad market fluctuations may also adversely affect the trading price of VYNE common stock.

In the past, following periods of volatility in the market price of a company’s securities, stockholders have often instituted class action securities litigation against such companies.

If we complete the Merger, the Combined Company will need to raise additional capital, including by potentially issuing equity securities or incurring debt, which may cause significant dilution to the Combined Company’s stockholders or restrict the Combined Company’s operations.

In connection with the Merger, VYNE and Yarrow entered into the Securities Purchase Agreement with certain investors, including existing investors of Yarrow, pursuant to which the investors agreed to purchase, in the aggregate, $100.0 million in shares of Yarrow common stock and Yarrow pre-funded warrants in the Yarrow Pre-Closing Financing immediately prior to the closing of the Merger.

Although the closing of the Yarrow Pre-Closing Financing is not a condition to the closing of the Merger with Yarrow, the closing of the Yarrow Pre-Closing Financing is conditioned upon the satisfaction or waiver of the conditions to the closing of the Merger as well as certain other conditions.

The shares of Yarrow common stock and the Yarrow pre-funded warrants issued in the Yarrow Pre-Closing Financing will result in dilution to all securityholders of the Combined Company (i.e., both VYNE's pre-Merger securityholders and former Yarrow securityholders).

Additional financing may not be available to the Combined Company, when we need it or may not be available on favorable terms.

To the extent that the Combined Company raises additional capital by issuing equity securities, such financing will cause additional dilution to all securityholders of the Combined Company, including VYNE's pre-Merger securityholders and Yarrow’s former securityholders.

It is also possible that the terms of any new equity securities may have preferences over the Combined Company common stock.

Any debt financing the combined company enters into may involve covenants that restrict our operations.

These restrictive covenants may include limitations on additional borrowing and specific restrictions on the use of VYNE's assets, as well as prohibitions on VYNE's ability to create liens, pay dividends, redeem VYNE stock or make investments.

In addition, if the Combined Company raises additional funds through licensing arrangements, it may be necessary to grant licenses on terms that are not favorable to the Combined Company.

Some of Yarrow’s and VYNE's directors and executive officers have interests in the Merger that are different from yours and that may influence them to support or approve the Merger without regard to your interests.

Our directors and executive officers and those of Yarrow may have interests in the Merger that are different from, or in addition to, the interests of VYNE's other stockholders generally.

These interests with respect to VYNE's directors and executive officers may include, among others, retention bonus payments, acceleration of previously issued equity awards, severance payments if employment is terminated in a qualifying termination in connection with the Merger and rights to continued indemnification, expense advancement and insurance coverage.

Further, certain current members of the Yarrow board of directors will continue as directors of the Combined Company after the effective time, and, following the closing of the Merger, will be eligible to be compensated as non-employee directors of the Combined Company pursuant to VYNE's non-employee director compensation policy that is expected to remain in place following the effective time.

These interests, among other factors, may have influenced the directors and executive officers of each company to support or approve the Merger.

Each of the VYNE board and the Yarrow board was aware of and considered those interests, among other matters, in reaching their decisions to approve and adopt the Merger Agreement, approve the Merger, and recommend the approval of the Merger Agreement to the VYNE stockholders and Yarrow stockholders, respectively.

The VYNE stockholders and the stockholders of Yarrow may not realize a benefit from the Merger commensurate with the ownership dilution they will experience in connection with the Merger, including the conversion of Yarrow common stock issued in the Yarrow Pre-Closing Financing.

If the Combined Company is unable to realize the full strategic and financial benefits currently anticipated from the Merger, VYNE's stockholders and Yarrow's stockholders will have experienced substantial dilution of their ownership interests without receiving any commensurate benefit, or only receiving part of the commensurate benefit to the extent the Combined Company is able to realize only part of the strategic and financial benefits currently anticipated from the Merger.

VYNE securityholders will generally have a reduced ownership and voting interest in, and will exercise less influence over the management of, the Combined Company following the completion of the Merger as compared to their current ownership and voting interests in the respective companies.

After the completion of the Merger, VYNE's current stockholders will generally own a smaller percentage of the Combined Company than their ownership of the company prior to the Merger.

Immediately after the Merger, VYNE securityholders as of immediately prior to the Merger are expected to own approximately 3.0% of the outstanding shares of capital stock of the Combined Company (on a fully-diluted basis, and subject to dilution from any equity issued by Yarrow after December 17, 2025 and before the closing), and former holders of Yarrow securities are expected to own approximately 97.0% of the outstanding shares of capital stock of the Combined Company (on a fully-diluted basis), subject to certain assumptions, including, but not limited to, our net cash as of closing being approximately $0, after giving effect to the Cash Dividend, which is expected to be approximately $14.5 to $16.5 million.

The Chief Executive Officer of Yarrow will serve as the Chief Executive Officer of the combined company following the completion of the Merger.

Certain provisions of the Merger Agreement may discourage third parties from submitting competing proposals, including proposals that may be superior to the transactions contemplated by the Merger Agreement.

While the Merger Agreement is in effect, each party is generally prohibited from, among other things, soliciting, initiating or knowingly encouraging, inducing or facilitating the communication, making, submission or announcement of any acquisition proposal or acquisition inquiry.

In addition, our current directors and executive officers have entered into support agreements pursuant to the terms of the Merger Agreement, and as an inducement to Yarrow’s willingness to enter into the Merger Agreement, by which they have agreed to vote all of their shares of common stock in favor of the Merger Agreement and the transactions contemplated thereby and against any competing proposals, subject to certain limited exceptions.

These provisions could discourage a potential competing acquirer from considering or proposing an acquisition or merger, even if it were prepared to pay consideration with a higher value than that implied by the merger consideration in the combination.

Because the lack of a public market for Yarrow common stock makes it difficult to evaluate the fair market value of its capital stock, the value of VYNE common stock to be issued to Yarrow stockholders may be more or less than the fair market value of Yarrow common stock.

The outstanding capital stock of Yarrow is privately held and is not traded on any public market.

The lack of a public market makes it difficult to determine the fair market value of Yarrow capital stock.

Because the percentage of the equity to be issued to Yarrow stockholders was determined based on negotiations between the parties, it is possible that the value of VYNE common stock to be issued to Yarrow stockholders will be more or less than the fair market value of Yarrow Capital Stock.

Lawsuits may be filed against us, Yarrow, or any of the members of our or Yarrow's boards of directors arising out of the Merger, which may delay or prevent the Merger.

Putative stockholder complaints, including stockholder class action complaints, and other complaints may be filed against us, our board of directors, Yarrow, the Yarrow board of directors and others in connection with the transactions contemplated by the Merger Agreement.

The outcome of litigation is uncertain, and VYNE or Yarrow may not be successful in defending against any such future claims.

Lawsuits that may be filed against VYNE, VYNE's board of directors, Yarrow, or the Yarrow board of directors could delay or prevent the Merger, divert the attention of VYNE's or Yarrow’s management and employees from their day-to-day business and otherwise adversely affect us and Yarrow financially.

VYNE has never paid and, other than in connection with the Merger with Yarrow, does not intend to pay any cash dividends in the foreseeable future.

VYNE has never paid cash dividends on any of its capital stock.

Other than in connection with the Merger, VYNE does not currently anticipate declaring or paying cash dividends on its capital stock in the foreseeable future.

If VYNE does not successfully consummate the Merger or another strategic transaction, VYNE's board of directors may decide to pursue a dissolution and liquidation of VYNE.

In such an event, the amount of cash available for distribution to VYNE stockholders will depend heavily on the timing of such liquidation as well as the amount of cash that will need to be reserved for commitments and contingent liabilities, as to which VYNE can give you no assurance.

There can be no assurance that the Merger will be completed.

If the Merger is not completed, VYNE's board of directors may decide to pursue a dissolution and liquidation of VYNE.

In such an event, the amount of cash available for distribution to VYNE stockholders will depend heavily on the timing of such decision and, ultimately, such liquidation, since the amount of cash available for distribution continues to decrease as we fund our operations while pursuing the Merger.

In addition, if VYNE's board of directors were to approve and recommend, and VYNE stockholders were to approve, a dissolution and liquidation of VYNE, VYNE would be required under Delaware law to pay its outstanding obligations, as well as to make reasonable provision for contingent and unknown obligations, prior to making distributions in liquidation to stockholders.

VYNE's commitments and contingent liabilities may include obligations under VYNE's employment and related agreements with certain employees that provide for severance and other payments following a termination of employment occurring for various reasons, including a change in control of VYNE, litigation against VYNE, and other various claims and legal actions arising in the ordinary course of business, and other unexpected and/or contingent liabilities.

As a result of this requirement, a portion of VYNE's assets would need to be reserved pending the resolution of such obligations.

In addition, VYNE may be subject to litigation or other claims related to a dissolution and liquidation of VYNE.

If a dissolution and liquidation were to be pursued, VYNE's board of directors, in consultation with its advisors, would need to evaluate these matters and make a determination about a reasonable amount to reserve.

Accordingly, you could lose all or a significant portion of your investment in the event of liquidation, dissolution or winding up of VYNE.

A liquidation would be a lengthy and uncertain process with no assurance of any value ever being returned to you.

VYNE will not have any right to make damage claims against Yarrow for the breach of any representation, warranty or covenant made by Yarrow in the Merger Agreement.

The Merger Agreement provides that all of the representations, warranties and covenants of the parties contained therein shall not survive the closing of the Merger, except for those covenants contained therein that by their terms apply or are to be performed in whole or in part after the Closing, and then only with respect to breaches occurring after the closing of the Merger.

Accordingly, there are no remedies available to the parties with respect to any breach of the representations, warranties, covenants or agreements of the parties to the Merger Agreement after the Closing of the Merger, except for covenants to be performed in whole or in part after the Closing.

As a result, VYNE and its stockholders will have no remedy available to us if the Merger is consummated and it is later revealed that there was a breach of any of the representations, warranties and covenants made by Yarrow at the time of the Merger.

Additionally, VYNE cannot assure you that the due diligence conducted in relation to Yarrow has identified all material issues or risks associated with Yarrow, its business or the industry in which it competes.

Furthermore, VYNE cannot assure you that factors outside of Yarrow’s or VYNE's control will not later arise, or that any previously identified risks will not materialize in a manner inconsistent with the preliminary analysis.

As a result of these factors, following the closing of the Merger, the Combined Company may be exposed to liabilities and incur additional costs and expenses and it may be forced to later write-down or write off assets, restructure its operations, or incur impairment or other charges.

VYNE and its stockholders have no indemnification rights against Yarrow or its stockholders under the Merger Agreement.

Accordingly, any of VYNE's stockholders who remain stockholders of the Combined Company following the Merger could suffer a reduction in the value of their securities.

Such stockholders are unlikely to have a remedy for such reduction in value unless they are able to successfully claim that the reduction was due to the breach by our directors or officers of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws that the registration statement or proxy statement/prospectus relating to the Merger contained an actionable material misstatement or material omission.

Risks Related to the Proposed Reverse Stock Split

The reverse stock split may not increase the Combined Company’s stock price over the long-term.

We are also seeking stockholder approval to conduct a reverse stock split, whether the Merger occurs or not.

The principal purpose of the reverse stock split is to increase the per-share market price of VYNE's common stock above the minimum bid price requirement under the Nasdaq rules and also, so that the listing of the shares of the Combined Company's common stock being issued in the Merger on Nasdaq will be approved.

It cannot be assured, however, that the reverse stock split will accomplish this objective for any meaningful period of time.

While it is expected that the reduction in the number of outstanding shares of common stock will proportionally increase the market price of VYNE's common stock, it cannot be assured that the reverse stock split will increase the market price of our common stock by a multiple of the reverse stock split ratio, or result in any permanent or sustained increase in the market price of VYNE common stock, which is dependent upon many factors, including our business and financial performance, general market conditions and prospects for future success.

Thus, while our stock price might meet the listing requirements for Nasdaq initially, it cannot be assured that it will continue to do so.

The reverse stock split may decrease the liquidity of the Combined Company common stock.

Although our board of directors believes that the anticipated increase in the market price of the Combined Company common stock resulting from the proposed reverse stock split could encourage interest in our common stock and possibly promote greater liquidity for its stockholders, such liquidity could also be adversely affected by the reduced number of shares outstanding after the reverse stock split.

The reduction in the number of outstanding shares may lead to reduced trading and a smaller number of market makers for our common stock.

In addition, the reverse stock split may not result in an increase in the Combined Company’s stock price necessary to satisfy Nasdaq’s initial listing requirements for the Combined Company.

The reverse stock split may lead to a decrease in the Combined Company’s overall market capitalization.

Should the market price of the Combined Company common stock decline after the reverse stock split, the percentage decline may be greater, due to the smaller number of shares outstanding, than it would have been prior to the reverse stock split.

A reverse stock split is often viewed negatively by the market and, consequently, can lead to a decrease in the Combined Company’s overall market capitalization.

If the per share market price does not increase in proportion to the reverse stock split ratio, then the value of the Combined Company, as measured by its stock capitalization, will be reduced.

In some cases, the per-share stock price of companies that have effected reverse stock splits subsequently declined back to pre-reverse split levels, and accordingly, it cannot be assured that the total market value of the Combined Company common stock will remain the same after the reverse stock split is effected, or that the reverse stock split will not have an adverse effect on the Combined Company’s stock price due to the reduced number of shares outstanding after the reverse stock split.

Risks Related to Development of Our Current Product Candidates

Our current business has been and, if the Merger is not consummated, is expected to be substantially dependent upon the successful development and regulatory approval of our biopharmaceutical product candidates.

If we are unable to successfully develop or obtain regulatory approval for any such candidate, our business may be materially harmed.

We currently have no products approved for sale and have historically invested substantially all of our efforts and financial resources in the development of our BET inhibitor product candidates, repibresib gel and VYN202.

If the Merger is not consummated, the identification, successful development and ultimate regulatory approval of a product candidate for any potential indications will be critical to the future success of our business.

We would need to raise sufficient funds for, and successfully enroll and complete, clinical development for a product candidate.

Our ability to successfully progress any product candidate may be hampered for many reasons, including:

• a product candidate may in a preclinical study or clinical trial be shown to have harmful side effects or other characteristics that indicate it is unlikely to be effective or otherwise does not meet applicable regulatory criteria;

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Our failure to successfully develop our product candidates will have a material adverse effect on our business and financial condition.

Our product candidates are in clinical development and may fail in development or suffer delays that materially and adversely affect their viability.

If we are unable to complete development of, or commercialize our product candidates, or experience significant delays in doing so, our business will be materially harmed.

Each of our product candidates is in clinical development.

We initiated a Phase 2b trial for repibresib gel in nonsegmental vitiligo in June 2024 and a Phase 1b trial for VYN202 in February 2025.

Our product candidates may fail in development or suffer delays that materially and adversely affect their viability.

If the Merger is not consummated and we are unable to complete development of, or commercialize our product candidates, or experience significant delays in doing so, our business will be materially harmed.

Our ability to achieve and sustain profitability depends on obtaining regulatory approvals for and successfully commercializing our product candidates, either alone or with third parties, and we cannot guarantee you that we will ever obtain regulatory approval for any of our product candidates.

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• varying interpretations of our data by the FDA and similar foreign regulatory agencies.

For example, in July 2025 we announced topline results from our Phase 2b trial evaluating repibresib gel in nonsegmental vitiligo which did not meet its primary endpoint of the proportion of subjects achieving an improvement in Facial Vitiligo Area Scoring Index of at least 50% from baseline (“F-VASI50”) at week 24 compared to vehicle.

The trial also missed a key secondary endpoint of F-VASI75.

Based on these data, we discontinued treatment in the then ongoing extension phase of the trial and terminated the trial.

Our inability to advance or complete the development of our product candidates, or significant delays in doing so, could have a material and adverse effect on our business, financial condition, results of operations and prospects.

We may encounter delays in enrolling patients and successfully completing clinical trials for our product candidates and may be delayed in, or prevented from, commencing such trials due to factors that are largely beyond our control.

We may encounter delays in enrolling patients and successfully completing clinical trials for our product candidates and may be delayed in, or prevented from, commencing or completing such trials due to factors that are largely beyond our control.

We have in the past experienced and may in the future experience delays in completing clinical trials and in commencing future clinical trials.

Clinical trials can be delayed or aborted for a variety of other reasons, including delay or failure to:

Clinical trials can be delayed or terminated for a variety of other reasons, including delay or failure to:

• obtain regulatory approval to commence a trial;

• reach agreement on acceptable terms with prospective contract research organizations ("CROs") and clinical trial sites, the terms of which may be subject to extensive negotiation and vary significantly among different CROs and trial sites;

• obtain approval from an institutional review board (“IRB”) at each site;

• obtain approval from an IRB at each site;

• enlist an adequate number of suitable patients to participate in a trial;

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• ensure clinical sites observe trial protocol or continue to participate in a trial;

• address any patient safety concerns that arise during the course of a trial;

• address any patient safety concerns that arise during the course of a trial, including due to non-clinical toxicology studies;

• address any conflicts with new or existing laws or regulations;

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• manufacture sufficient quantities of the product candidate for use in clinical trials.

Patient enrollment is also a significant factor in the timing of clinical trials and is affected by many factors, including the size and nature of the patient population, the proximity of patients to clinical sites, the eligibility criteria for the trial, the design of the clinical trial, competing clinical trials and clinicians’ and patients’ perceptions as to the potential advantages of the drug being studied in relation to available alternatives, including any new drugs or treatments that may be approved for the indications we are investigating.

We may be delayed in commencing our clinical trials if the FDA, or other applicable regulatory authority, finds deficiencies or requests additional information with respect to our INDs.

A protocol for each clinical trial and any subsequent protocol amendments must be submitted to the FDA as part of the IND.

An IND becomes effective 30 days after receipt by the FDA, unless before that time the FDA raises concerns or questions related to a proposed clinical trial and places the trial on clinical hold.

In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin.

For example, our Phase 1a trial for VYN202 was initially placed on a clinical hold.

Following submission of additional nonclinical study data, the hold was lifted and we proceeded to conduct the trial, which was completed in the fourth quarter of 2024.

Patient enrollment is also a significant factor in the timing of clinical trials, or we may be prevented from completing our clinical trials, and is affected by many factors, including the size and nature of the patient population, the proximity of patients to clinical sites, the eligibility criteria for the trial, the design of the clinical trial, competing clinical trials and clinicians’ and patients’ perceptions as to the potential advantages of the drug being studied in relation to available alternatives, including any new drugs or treatments that may be approved for the indications we are investigating.

We may be delayed in commencing or conducting our clinical trials, or we may be prevented from completing our clinical trials, if the FDA, or other applicable regulatory authority, finds deficiencies or requests additional information with respect to our INDs.

For example, the FDA informed us in April 2025 that it placed a clinical hold on our Phase 1b trial for VYN202 following a recent observation of testicular toxicity in dogs from a non-clinical toxicology study with VYN202.

FDA lifted the clinical hold for female subjects on the 0.25 mg and 0.5 mg doses but did not lift the hold for subjects on the 1 mg dose due to its lower toxicological safety margin, even though a No-Observed-Adverse-Effect Level (NOAEL) was established covering all clinical doses in females.

FDA also required sufficient data from a 12-week non-clinical toxicology study of VYN202 in dogs in order to resume the trial in male clinical subjects.

In addition to this dog study, we may be required to conduct additional nonclinical studies in order to address the clinical hold, or initiate a new clinical study in the different indication, and if unsuccessful, we may be unable to initiate a new clinical trial of VYN202 or such toxicity would limit the populations and indications for which VYN202 could be developed.

These factors could lead to our inability to further develop VYN202.

We may also encounter delays if a clinical trial or a clinical trial site is suspended or terminated by us, the IRB of the institutions in which such trials are being conducted, by the trial’s data safety monitoring board, or by the FDA.

authorities may suspend or terminate one or more of our clinical trials due to a number of factors, including our failure to conduct the clinical trial in accordance with relevant regulatory requirements or clinical protocols, inspection of the clinical trial operations or trial site by the FDA resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a drug, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial.

If we experience delays in carrying out or completing any clinical trial of our product candidates, the commercial prospects of our product candidates may be harmed, and our ability to generate product revenues from any of these product candidates will be delayed.

In addition, any delays in completing our clinical trials will increase our costs, slow down our product candidate development and approval process and jeopardize our ability to commence product sales and generate revenues.

Such authorities may suspend or terminate one or more of our clinical trials due to a number of factors, including our failure to conduct the clinical trial in accordance with relevant regulatory requirements or clinical protocols, inspection of the clinical trial operations or trial site by the FDA resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a drug, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial.

If we experience delays in carrying out or completing any clinical trial of our product candidates, we may be forced to cease developing our product candidates, we may be unable to achieve approval of our product candidates and the commercial prospects of our product candidates may be harmed.

In addition, any delays in completing our clinical trials, or inability to complete such trials, will increase our costs, slow down our product candidate development and approval process and jeopardize our ability to commence product sales and generate revenues.

Any of these occurrences may significantly harm our business and financial condition.

In addition, many of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of regulatory approval of our product candidates.

International trade policies, including tariffs, sanctions and trade barriers may adversely affect our business, financial condition, results of operations and prospects.

We operate in a global economy, which includes utilizing third-party suppliers in several countries outside the United States.

There is inherent risk, based on the complex relationships among the U.S.

and the countries in which we conduct our business, that political, diplomatic and national security factors can lead to global trade restrictions and changes in trade policies and export regulations that may adversely affect our business and operations.

The current international trade and regulatory environment is subject to significant ongoing uncertainty.

government has recently announced substantial new tariffs affecting a wide range of products and jurisdictions and has indicated an intention to continue developing new trade policies, including with respect to the pharmaceutical industry.

In response, certain foreign governments have announced or implemented retaliatory tariffs and other protectionist measures.

These developments have created a dynamic and unpredictable trade landscape, which may adversely impact our business, results of operations, financial condition and prospects.

The Bureau of Industry and Security, U.S.

Department of Commerce, has initiated an investigation to determine whether pharmaceutical ingredients, including finished drug product, manufactured outside the United States pose a national security risk and should be subject to additional tariffs.

We do not own or operate, and currently have no plans to establish, any manufacturing facilities.

We currently contract with third party manufacturers for all of our required raw materials, active ingredients and finished products for our preclinical studies and clinical trials for our product candidates.

We currently have no plans to establish our own manufacturing capabilities and plan to continue to rely on third-party manufacturers for any future trials of our product candidates.

Currently, our active pharmaceutical ingredients (“APIs”) for our product candidates are manufactured in China.

We also rely on specialized laboratory equipment, supplies and materials, all or part of which we believe may be ultimately sourced from multiple countries outside the United States, to advance our research and development efforts.

Current or future tariffs may result in increased research and development expenses, including with respect to increased costs associated with APIs, raw materials, laboratory equipment and research materials and components.

In addition, such tariffs will increase our supply chain complexity and could also potentially disrupt our existing supply chain.

Unlike consumer goods, pharmaceuticals face unique regulatory constraints that make rapid supply chain adjustments particularly difficult and costly.

Trade restrictions affecting the import of materials necessary for clinical trials could result in delays to our development timelines.

Increased development costs and extended development timelines could place us at a competitive disadvantage compared to companies operating in regions with more favorable trade relationships and could reduce investor confidence, negatively impacting our ability to secure additional financing on favorable terms or at all.

Foreign governments may also take other retaliatory actions against U.S.

entities, such as decreased intellectual property protection, increased enforcement actions, or delays in regulatory approvals, which may result in heightened international legal and operational risks.

In addition, the United States and other governments have imposed and may continue to impose additional sanctions, such as trade restrictions or trade barriers, which could restrict us from doing business directly or indirectly in or with certain countries or parties and may impose additional costs and complexity to our business.

Trade disputes, tariffs, restrictions and other political tensions between the United States and other countries may also exacerbate unfavorable macroeconomic conditions including inflationary pressures, foreign exchange volatility, financial market instability and economic recessions or downturns.

The ultimate impact of current or future tariffs and trade restrictions remains uncertain and could materially and adversely affect our business, financial condition and prospects.

While we actively monitor these risks, any prolonged economic downturn, escalation in trade tensions, or deterioration in international perception of U.S.-based companies could materially and adversely affect our business, ability to access the capital markets or other financing sources, results of operations, financial condition and prospects.

In addition, tariffs and other trade developments have and may continue to heighten the risks related to the other risk factors described elsewhere in this Annual Report for the fiscal year ended December 31, 2025.

Drug development is very expensive, time-consuming and uncertain.

Our preclinical studies and clinical trials may fail to adequately demonstrate the safety and efficacy of our current or any future product candidates, or serious adverse side effects could be identified.

Any of these outcomes could prevent or delay regulatory approval and commercialization or harm our ability to pursue strategic alternatives for our product candidates.

Any of these outcomes could prevent or delay regulatory approval and commercialization or, if the Merger is not consummated, harm our ability to pursue other strategic alternatives for our product candidates.

Drug development is very expensive, time-consuming and difficult to design and implement, and its outcome is inherently uncertain, particularly as it relates to new chemical entities.

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If we experience delays in the completion of, or if we terminate, any of our future clinical trials, our business, financial condition, operating results and prospects would be adversely affected.

In addition, product candidates that initially showed promise in early stage testing have later been found to cause side effects that prevented further development of the product candidate.

For example, some systemic BET inhibitors have been linked to tolerability issues, particularly in the gastrointestinal tract and bone marrow suppressive effects like thrombocytopenia.

In addition, product candidates that initially showed promise in early stage testing may later be found to be not effective or cause side effects that prevent further development of the product candidate.

For example, on July 30, 2025, we announced that our Phase 2b trial of repibresib gel in nonsegmental vitiligo did not achieve primary endpoint or key secondary endpoint of F-VASI50 and F-VASI75, respectively.

We also announced in July 2025 that we decided to discontinue treatment in the ongoing extension phase of the trial and terminated the trial.

If our product candidates are associated with side effects in preclinical studies and/or clinical trials or have characteristics that are unexpected, a number of potentially significant negative consequences could result, including:

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For example, systemic BET inhibitors have historically targeted both BD1 and BD2 less selectively, causing gastrointestinal toxicity and bone marrow suppressive effects like thrombocytopenia.

verifying any toxicity associated with VYN202.

While we believe VYN202’s high selectivity for BD2 may alleviate the therapeutic limiting toxicities observed by other less BD2-selective BET inhibitors, we may need to spend more time and greater resources verifying any toxicity associated with VYN202, including the 12 week canine toxicology study that we are currently conducting in order to permit future dosing of male patients.

Accordingly, the regulatory pathway for our new chemical entities may be more demanding and take a longer period of time.

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Phase 3 clinical trials often produce unsatisfactory results even though prior clinical trials were successful.

Any of these events could prevent us from pursuing strategic alternatives, including identifying and consummating transactions with third-party partners, to further develop, obtain marketing approval for and/or commercialize a particular product candidate and could significantly harm our business, results of operations and prospects.

For example, our Phase 2b trial of repibresib gel in nonsegmental vitiligo did not meet its primary or secondary endpoint, and our VYN202 Phase 1b trial in moderate to severe plaque psoriasis was terminated early due to the need to conduct a canine 12 week nonclinical study in order to reinitiate dosing in male patients.

Any such future events could prevent us from pursuing strategic alternatives, including identifying and consummating transactions with third-party partners, to further develop, obtain marketing approval for and/or commercialize a particular product candidate and could significantly harm our business, results of operations and prospects.

Top-line and preliminary data from our clinical trials that we announce or publish from time to time may change as additional data become available and are subject to audit and verification procedures that could result in material changes in the final data.

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

We have chosen to initially evaluate repibresib gel in the treatment of nonsegmental vitiligo, and we intend to initially evaluate VYN202 in the treatment of moderate-to-severe plaque psoriasis and, subject to adequate levels of funding, moderate-to-severe

adult-onset rheumatoid arthritis.

As a result, we may forego or delay pursuit of opportunities with other product candidates or for other indications that later prove to have greater commercial potential.

We may forego or delay pursuit of opportunities with other product candidates or for other indications that later prove to have greater commercial potential.

Our resource allocation decisions may cause us to fail to capitalize on viable commercial drugs or profitable market opportunities.

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Our competitors have developed, are developing or will develop product candidates and processes competitive with our product candidates and processes.

Competitive therapeutic treatments, such as OPZELURA (ruxolitinib) cream, include those that have already been approved and accepted by the medical community and any new treatments, including those based on novel technology platforms that enter the market.

Competitive therapeutic treatments, include those that have already been approved and accepted by the medical community and any new treatments, including those based on novel technology platforms that enter the market.

We believe that a significant number of products are currently under development, and may become commercially available in the future, for the treatment of conditions for which we are trying, or may try, to develop product candidates.

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In addition, we are subject to government regulations and we may experience delays in obtaining required regulatory approvals to market our proposed product candidates.

could negatively impact us by reducing revenues or increasing expenses, and cause the product not to be commercially viable.

Even if we receive approval of any regulatory filing for our product candidates, the FDA may grant approval contingent on the performance of additional costly post-approval clinical trials or REMS to monitor the safety or efficacy of the product, which could negatively impact us by reducing revenues or increasing expenses, and cause the product not to be commercially viable.

Absence of long-term safety data may further limit the approved uses of products.

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Costs arising out of any regulatory developments could be time-consuming and expensive and could divert management resources and attention and, consequently, could adversely affect our business operations and financial performance.

We rely on third parties to conduct, supervise and monitor our clinical trials, and if these third parties perform in an unsatisfactory manner, it may harm our business.

We rely on medical institutions, clinical investigators, contract laboratories, collaborative partners and other third parties, such as CROs, to assist us in conducting our clinical trials for our other product candidates.

While we will have agreements governing their activities, we will have limited influence over their actual performance.

We have historically relied on third parties to conduct, supervise and monitor our clinical trials, and if these third parties perform in an unsatisfactory manner, it may harm our business.

We have historically relied, and may in the future rely on medical institutions, clinical investigators, contract laboratories, collaborative partners and other third parties, such as CROs, to assist us in conducting our clinical trials for our other product candidates.

While we have had and expect to have agreements governing their activities, we will have limited influence over their actual performance.

We will control only certain aspects of our CROs’ activities.

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If we or our CROs fail to comply with applicable GCPs, or if our CROs do not adequately monitor the conduct of medical institutions, clinical investigators, contract laboratories or other third parties involved in our clinical trials, the clinical data generated in our clinical trials may be deemed unreliable and the FDA and other regulatory authorities may require us to perform additional clinical trials before approving any marketing applications.

trial protocols or GCPs, or for any other reason, our clinical trial results may be negatively impacted and/or we may need to conduct additional clinical trials or enter into new arrangements with alternative third parties, which could be difficult, costly or impossible.

If the third parties or consultants that assist us in conducting our clinical trials do not perform their contractual duties or obligations, experience work stoppages, do not meet expected deadlines, terminate their agreements with us or need to be replaced, or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our clinical trial protocols or GCPs, or for any other reason, our clinical trial results may be negatively impacted and/or we may need to conduct additional clinical trials or enter into new arrangements with alternative third parties, which could be difficult, costly or impossible.

As a result, our clinical trials may be extended, delayed or terminated or may need to be repeated.

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Risks Related to Our Financial Position and Need for Capital

We will need substantial additional funding to pursue our business objectives.

We will need substantial additional funding to pursue our business objectives if the Merger is not completed.

If we are unable to raise capital when needed, we could be forced to curtail our planned operations.

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We expect to incur significant expenses and operating losses for the foreseeable future as we advance our product candidates from discovery through preclinical and clinical development.

In addition, we may not be able to identify and consummate transactions with third-party partners to further develop, obtain marketing approval for and/or commercialize our product candidates, and our product candidates, if approved, may not achieve commercial success.

In addition, we may not be able to identify and consummate transactions with third-party partners to further develop, obtain marketing approval for and/or commercialize its product candidates, and its product candidates, if approved, may not achieve commercial success.

Furthermore, we incur and expect to continue to incur significant costs associated with operating as a public company, including legal, accounting, investor relations and other expenses.

We also expect to add additional personnel to support our operational plans and strategic direction as needed.

As of December 31, 2025, we had $29.0 million in cash, cash equivalents and marketable securities.

We believe these resources will enable us to fund our operating expenses and capital expenditure requirements for a period of at least 12 months from the date of this Annual Report on Form 10-K based on our current operating assumptions.

We believe these resources are sufficient to fund our operating and capital expenditure requirements through the anticipated closing date of the Merger and for a period of at least 12 months from the date of issuance of the audited consolidated financial statements included in this Annual Report.

These assumptions may prove to be wrong, however, and we could use our available capital resources sooner than we expect.

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• milestone payments associated with our development programs;

• the timing and completion of the Merger;

• the number and development requirements of the product candidates that we may pursue;

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• the impact on the timing of our preclinical studies, on the recruitment, enrollment, conduct and timing of our clinical trials, and on our business, due to external or macroeconomic factors;

• our headcount and associated costs as we expand our research and development infrastructure;

• our headcount and associated costs as we potentially expand our research and development infrastructure;

• our ability to identify and consummate transactions with third-party partners to further develop, obtain marketing approval for and/or commercialize our product candidates, and earn revenue from such arrangements;

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As of December 31, 2025, we had an accumulated deficit of $757.7 million.

We expect our losses to continue as we continue to devote a substantial portion of our resources to our research and development efforts.

We expect to continue to incur significant losses in connection with our ongoing activities, including continuing to operate as a public company.

These losses have had, and will continue to have, an adverse effect on our working capital, total assets, and shareholders’ equity.

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SEC regulations limit the amount that companies with a public float of less than $75 million may raise during any 12-month period pursuant to a shelf registration statement on Form S-3, referred to as the baby shelf rules.

As of the filing of this Annual Report on Form 10-K, we are subject to such rules.

As of the filing of this Annual Report, we are subject to such rules.

Under these rules, the amount of funds we can raise through primary public offerings of securities in any 12-month period using our registration statement on Form S-3, including our at-the-market equity offering program, will be limited to one-third of the aggregate market value of the shares of our common stock held by our non-affiliates.

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Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish proprietary rights.

We currently expect to finance our cash needs through a combination of equity offerings, debt financings, collaborations, strategic alliances and licensing arrangements.

If the Merger is not consummated, we may finance our cash needs through a combination of equity offerings, debt financings, collaborations, strategic alliances and licensing arrangements.

On March 1, 2024, we entered into a sales agreement with Cowen and Company, LLC, as sales agent ("Cowen") under which we may offer and sell, from time to time at our sole discretion, shares of our common stock through Cowen in an at-the-market offering having an aggregate offering price up to $50.0 million.

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When entering collaboration arrangements, we are subject to a number of risks, including:

renew development or commercialization programs based on clinical trial results, changes in their strategic focus due to their acquisition of competitive products or their internal development of competitive products, availability of funding or other external factors, such as a business combination that diverts resources or creates competing priorities;

• collaborators may delay clinical trials, provide insufficient funding for a clinical trial, stop a clinical trial or abandon products, repeat or conduct new clinical trials, require a new formulation of products for clinical testing, may decide not to pursue development and commercialization of a product or product candidate or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in their strategic focus due to their acquisition of competitive products or their internal development of competitive products, availability of funding or other external factors, such as a business combination that diverts resources or creates competing priorities;

• any safety issues or adverse side effects that result from trials conducted by a collaborator will adversely impact our ability to obtain regulatory approval for our product candidates;

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• disagreements between parties to a collaboration arrangement regarding clinical development matters may lead to delays in the development process or commercializing the applicable product candidate and, in some cases, termination of the collaboration arrangement;

• collaboration arrangements are complex and time-consuming to negotiate, document and implement, and we may not be successful in our efforts to establish and implement collaborations or other alternative arrangements should we so chose to enter into such arrangements;

• collaborations with pharmaceutical or biotechnology companies and other third parties often are terminated or allowed to expire by the other party and any such termination or expiration would adversely affect us financially and could harm our business reputation;

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Our failure to successfully in-license, acquire, develop and market additional product candidates or approved products could impair our ability to grow our business.

We may in-license, acquire and develop additional product candidates.

If the Merger is not consummated, we may pursue other strategic alternatives or in-license, acquire and develop additional product candidates.

The success of this strategy depends partly upon our ability to identify and select promising pharmaceutical product candidates, negotiate licensing or acquisition agreements with their current owners and finance these arrangements.

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All product candidates are prone to risks of failure typical of pharmaceutical product development, including the possibility that a product candidate will not be shown to be sufficiently safe and effective for approval by regulatory authorities.

We may engage in strategic transactions, which could impact our liquidity, increase our expenses and present significant distractions to our management.

We may in-license and acquire product candidates or engage in other strategic transactions.

If the Merger is not consummated, we may engage in strategic transactions, which could impact our liquidity, increase our expenses and present significant distractions to our management.

We may in-license and acquire product candidates or engage in other strategic transactions if the Merger is not consummated.

Additional potential transactions that we may consider include a variety of different business arrangements, including out-licensing, strategic partnerships, joint ventures, restructurings, divestitures, business combinations and investments.

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We have in the past decided and may again in the future decide to discontinue the development of any of our product candidates in our pipeline or not to continue to commercialize any approved product.

The trial also missed a key secondary endpoint of F-VASI75.

Based on these data, we discontinued treatment in the then ongoing extension phase of the trial and terminated the trial.

We may discontinue development of other product candidates for a variety of reasons, such as the appearance of new technologies that make our product less commercially viable, resource allocation management, an increase in competition from generic or other competing products, changes in or failure to comply with applicable regulatory requirements, the discovery of unforeseen side effects during clinical development or after the approved product has been marketed or the occurrence of adverse events at a rate or severity level that is greater than experienced in prior clinical trials.

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Supply interruptions may disrupt the availability of our product candidates and cause delays in conducting preclinical or clinical activities.

We depend on a limited number of manufacturing facilities to manufacture our product candidates.

We have historically depended on a limited number of manufacturing facilities to manufacture our product candidates.

Numerous factors could cause interruptions in the supply or manufacture of our product candidates, including:

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• business interruptions resulting from geopolitical actions, including war, such as the current Russia-Ukraine war and Israel-Hamas war, and terrorism, outbreak of a contagious disease, or natural disasters including earthquakes, typhoons, floods and fires.

Furthermore, the primary manufacturer of the active pharmaceutical ingredient ("API") in our product candidates is located in China.

Certain Chinese biotechnology companies and contract manufacturing organizations may become subject to trade

restrictions, sanctions, and other regulatory requirements by the U.S.

Furthermore, the primary manufacturer of the active pharmaceutical ingredient ("API") in our product candidates is WuXi Apptec, located in China.

Certain Chinese biotechnology companies, including WuXi Apptec, and contract manufacturing organizations may become subject to trade restrictions, sanctions, and other regulatory requirements by the U.S.

government, which could restrict or even prohibit our ability to work with such entities, thereby potentially disrupting the supply of material to us.

Such disruption could have adverse effects on the development of our product candidates and our business operations.

Therefore, we are exposed to the possibility of product supply disruption and increased costs in the event of changes in the policies of the United States or Chinese governments or political unrest or unstable economic conditions in China.

The United States has recently passed legislation, namely the BIOSECURE Act (the “Act”), to prohibit U.S.

federal executive agencies from procuring or obtaining any biotechnology equipment or service produced or provided by a “biotechnology company of concern” or entering into or renewing a contract, loan, or grant with an entity that uses such biotechnology equipment or equipment.

The Act prohibits the U.S.

Government from procuring or obtaining biotechnology equipment or services produced or provided by a “biotechnology company of concern” (“BCC”);

entering into, extending, or renewing government contracts with an entity that directly or indirectly (e.g., via a subcontractor) uses biotechnology equipment or services from a BCC in performance of that federal contract;

and/or issuing grants or loans to purchase, obtain, or use biotechnology equipment or services produced by a BCC.

The Act also prohibits U.S.

government loan and grant recipients from using federal loan or grant money to enter into contracts with entities that use equipment from BCCs in the performance of any federal prime contract or subcontract.

Companies designated as a BCC include those that are identified on the U.S.

Department of Defense’s annual List of Chinese Military Companies, also known as the 1260H List, and the U.S.

Government also has the ability to designate entities as BCCs through a separate designation process.

Given the Act, we may be restricted in our ability to work with certain Chinese biotechnology companies to the extent it would contract with, or otherwise receive funding from, the U.S.

As a result, we may need to seek alternative suppliers.

If we are required to change manufacturers for any reason, we will be required to verify that the new manufacturer maintains facilities and procedures that comply with quality standards and with all applicable regulations and guidelines.

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We have no state research and development tax credit carryforwards.

Portions of these net operating loss and tax credit carryforwards could expire unused and be unavailable if we do not generate sufficient taxable income prior to their expiration.

federal net operating losses incurred in the taxable years beginning after December 31, 2017 may be carried forward indefinitely, but the ability to utilize such federal net operating loss carryforwards to offset taxable income is limited to 80% of our current year taxable income.

In addition, under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, and corresponding provisions of state law, if a corporation undergoes an “ownership change” (generally defined as a greater than 50 percentage point change, by value, in its equity ownership by significant stockholders over a three-year period) the corporation’s ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes to offset its post-change income or tax liability may be limited.

We have not completed a 382 study through December 31, 2024, however, we may have experienced ownership changes in the past, including in connection with the 2020 merger between Menlo (our predecessor company) and Foamix.

In addition, our private placement transaction in November 2023 likely resulted in an ownership change for purposes of Section 382.

In addition, under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, and corresponding provisions of state law, if a corporation undergoes an “ownership change” (generally defined as a greater than 50 percentage point change, by value, in its equity ownership by significant stockholders over a three-year period) the corporation’s ability to use its pre-chan ge net operating loss carryforwards and other pre-change tax attributes to offset its post-change income or tax liability may be limited.

The Merger will result in an ownership change for us and, accordingly, our NOL carryforwards and certain other tax attributes will be subject to limitations (or disallowance) on our use after the Merger.

Yarrow’s NOL carryforwards may also be subject to limitation as a result of prior shifts in equity ownership and/or the Merger.

Additional ownership changes in the future could result in additional limitations on our NOL carryforwards.

We have not completed a Section 382 study through December 31, 2025;

however, we have completed a 382 study through March 31, 2025, and we determined that the Company experienced ownership changes in connection with the 2020 merger between Menlo Therapeutics (our predecessor company) and Foamix Pharmaceuticals Ltd.

and with our private placement transaction in November 2023.

We may also experience ownership changes in the future as a result of the subsequent shifts in our stock ownership, some of which may be outside of our control.

As a result, even if we earn taxable income , our ability to use our net operating loss and tax credit carryforwards may be materially limited, which could harm our future operating results by effectively increasing our future tax obligations.

Consequently, even if we achieve profitability, we may not be able to utilize a material portion of our NOL carryforwards and other tax attributes, which could have an adverse effect on cash flow and results of operations.

The Israeli Tax Authority may disagree with our conclusions regarding certain tax positions, resulting in unanticipated costs, taxes or non-realization of expected benefits.

In December 2020, we initiated a voluntary liquidation of our Israeli subsidiary in order to consolidate the ownership of our intellectual property.

In connection with the liquidation, the intellectual property and other assets owned by our Israeli subsidiary were assigned to us.

Based on our analysis, we notified the Israeli Tax Authority that the gains realized by our Israeli subsidiary from the transfer of its assets to us were offset by net operating losses and that the liquidation did not result in tax in Israel under Israeli tax law.

In the event that the Israeli Tax Authority does not agree with our analysis, we may be subject to a material tax liability.

In connection with the liquidation, the intellectual property and other assets owned by our Israeli subsidiary were assigned to VYNE.

Based on our analysis, we notified the Israeli Tax Authority (the "ITA") that the gains realized by our Israeli subsidiary from the transfer of its assets to us were offset by net operating losses and that the liquidation did not result in tax in Israel under Israeli tax law.

In September 2025, the Company closed its tax file with the ITA however, the ITA has until December 31, 2026 to assess the returns.

In the event that the ITA does not agree with our analysis, we may be subject to a material tax liability.

In addition, we may incur additional costs associated with defending our position.

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In addition, to the extent we hire personnel from competitors, we may be subject to allegations that they have been improperly solicited or that they have divulged proprietary or other confidential information, or that their former employers own their research output.

In connection with the Merger, we may experience increased employee attrition, challenges to recruiting, and distraction during integration planning and following Closing, which could adversely affect execution of our operating plans.

Potential adverse reactions among employees and prospective hires arising from the announcement and completion of the Merger, as well as uncertainty regarding roles and organizational structure, could impair retention and hiring.

We may become subject to lawsuits or investigations that could have a material adverse impact on our business, results of operations and financial condition.

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If our information technology systems or those of third parties upon which we rely or our data are, or were, compromised, we could experience adverse consequences resulting from such compromise, including but not limited to regulatory investigations or actions, litigation, fines and penalties, disruptions of our business operations, reputational harm, loss of revenue or profits and other adverse consequence.

Despite the implementation of security measures, our information technology systems and infrastructure, and those of our current and any future partners, contractors and consultants, are vulnerable to damage from computer viruses, unauthorized access, natural disasters, terrorism, war and telecommunication and electrical failures.

The ever-increasing use and evolution of technology, including cloud-based computing, creates opportunities for the unintentional dissemination or intentional destruction of confidential information stored in our systems or in non-encrypted portable media or storage devices.

In the ordinary course of our business, we and the third parties upon which we rely process proprietary, confidential, and sensitive data, including personal data (such as health-related data), intellectual property, and trade secrets (collectively, sensitive information) face a variety of evolving threats, including but not limited to cyber extortion, which could cause security incidents.

Our information technology systems and infrastructure, and those of our current and any future partners, contractors and consultants, are vulnerable to damage from computer viruses, unauthorized access, natural disasters, terrorism, war and telecommunication and electrical failures.

The ever-increasing use and evolution of technology, including cloud-based computing and proliferation of artificial intelligence, creates opportunities for the unintentional dissemination or intentional destruction of confidential information stored in our systems or in non-encrypted portable media or storage devices.

Cyber-attacks, malicious internet-based activity, online and offline fraud, and other similar activities threaten the confidentiality, integrity, and availability of our sensitive information and information technology systems, and those of the third parties upon which we rely.

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Some actors now engage and are expected to continue to engage in cyber-attacks, including without limitation nation-state actors for geopolitical reasons and in conjunction with military conflicts and defense activities.

During times of war and other major conflicts, we, the third parties upon which we rely, may be vulnerable to a heightened risk of these attacks, including retaliatory cyber-attacks, that could materially disrupt our systems and operations, supply chain, and ability to produce, sell and distribute our goods and services.

During times of war and other major conflicts, we and the third parties upon which we rely, may be vulnerable to a heightened risk of these attacks, including retaliatory cyber-attacks, that could materially disrupt our systems and operations, supply chain, and ability to produce, sell and distribute our goods and services.

We and the third parties upon which we rely may be subject to a variety of evolving threats, including but not limited to social-engineering attacks (including through phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks (such as credential stuffing), credential harvesting, personnel misconduct or error, ransomware attacks, supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, telecommunications failures, attacks enhanced or facilitated by artificial intelligence, and other similar threats.

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Remote work has increased risks to our information technology systems and data, as more of our employees utilize network connections, computers and devices outside our premises or network, including working at home, while in transit and in public locations.

Future or past business transactions (such as acquisitions or integrations) could expose us to additional cybersecurity risks and vulnerabilities, as our systems could be negatively affected by vulnerabilities present in acquired or integrated entities’

systems and technologies.

Furthermore, we may discover security issues that were not found during due diligence of such acquired or integrated entities, and it may be difficult to integrate companies into our information technology environment and security program.

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To the extent that any disruption or security breach were to result in a loss of, or damage to, our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability and the further development of our current and any future product candidates could be delayed.

We may expend significant resources or modify business activities to try to protect our information technology systems, infrastructure, and data, without assurances that any security measure or modified practice will be effective as implemented.

In the event of a security incident, we may expend additional significant resources in analyzing and responding to each such security incident and related threats or losses.

In the event of any such disruption, security breach, or similar incident, we cannot be sure that our insurance coverage will be adequate or sufficient to protect us from or to mitigate liabilities arising out of our privacy and security practices, that such coverage will continue to be available on commercially reasonable terms or at all, or that such coverage will pay future claims.

Additionally, our contracts may contain limitations on liability such that there can be no assurance that the third parties on which we rely would be contractually obligated to indemnify or reimburse us for liabilities, damages, claims, and losses arising from security incidents experienced by, or otherwise attributable in whole or part to, such third parties or the third parties on which we rely.

Our employees, independent contractors, principal investigators, consultants, vendors, CROs and any partners with which we may collaborate may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements, which could have an adverse effect on our business.

We are exposed to the risk that our employees, independent contractors, principal investigators, consultants, vendors, CROs, distributors, prescribers, pharmacies and any partners with which we may collaborate may engage in fraudulent or other illegal activity.

This includes historical misconduct we may inherit in connection with the integration of Yarrow employees and independent contractors into a joint workforce.

Misconduct by these persons could include intentional, reckless or negligent conduct or unauthorized activity that violates:

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We are subject to various U.S.

federal, state, local and foreign health care fraud and abuse laws, including anti-kickback, self-referral, false claims and fraud laws, health information privacy and security, and transparency laws, and any violations by us of such laws could result in substantial penalties or other consequences including criminal sanctions, civil

penalties, contractual damages, reputational harm, and diminished profits and future earnings.

Additionally, any challenge to or investigation into our practices under these laws could cause adverse publicity and be costly to respond to, and thus could harm our business.

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Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it to have committed a violation;

• HIPAA, as amended by HITECH, and their respective implementing regulations, including the Final Omnibus Rule published on January 25, 2013, which impose, among other things, obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information held by certain healthcare providers, health plans and healthcare clearinghouses, known as “covered entities,” and “business associates.” Among other things, HITECH made certain aspects of HIPAA’s rules (notably the Security Rule) directly

applicable to business associates - independent contractors or agents of covered entities that receive or obtain individually identifiable health information in connection with providing a service on behalf of a covered entity, and their covered subcontractors.

• HIPAA, as amended by HITECH, and their respective implementing regulations, which impose, among other things, obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information held by certain healthcare providers, health plans and healthcare clearinghouses, known as “covered entities,” and “business associates.” Among other things, HITECH made certain aspects of HIPAA’s rules (notably the Security Rule) directly applicable to business associates - independent contractors or agents of covered entities that receive or obtain individually identifiable health information in connection with providing a service on behalf of a covered entity, and their covered subcontractors.

HITECH also created four new tiers of civil monetary penalties, amended HIPAA to make civil and criminal penalties directly applicable to business associates, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal court to enforce the federal HIPAA laws and seek attorney’s fees and costs associated with pursuing federal civil actions.

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Due to the breadth of these laws, the narrowness of statutory exceptions and regulatory safe harbors available, and the range of interpretations to which they are subject, it is possible that some of our current or future practices might be challenged under one or more of these laws.

Responding to investigations, enforcement actions and litigation can be time-and resource-

consuming and can divert management’s attention from the business.

Responding to investigations, enforcement actions and litigation can be time-and resource-consuming and can divert management’s attention from the business.

Any such investigation, action, litigation or settlement could increase our costs or otherwise have an adverse effect on our business and reputation.

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Data Privacy Framework and the UK extension thereto (which allows for transfers to relevant U.S.-based organizations who self-certify compliance and participate in the Framework), these mechanisms are subject to legal challenges, and there is no assurance that we can satisfy or rely on these measures to lawfully transfer personal data to the United States.

If there is no lawful manner for us to transfer personal data from the EEA, the UK or other jurisdictions to the United States, or if the requirements for a legally-compliant transfer are too onerous, we could face significant adverse consequences, including the interruption or degradation of our operations, the need to relocate part of or all of our business or data processing activities to other jurisdictions (such as Europe) at significant expense, increased exposure to regulatory actions, substantial fines and penalties, the inability to transfer data and work with partners, vendors and other third parties, and injunctions against our processing or transferring of personal data necessary to operate our business.

Additionally, companies that transfer personal data out of the EEA and UK to other jurisdictions, particularly to the United States, are subject to increased scrutiny from regulators, individual litigants, and activist groups.

When our employees and personnel use generative artificial intelligence (“AI”) technologies to perform their work, the disclosure and use of personal data in generative AI technologies is subject to various privacy laws and other privacy obligations.

Governments have passed and are likely to pass additional laws regulating generative AI.

Our use of this technology could result in additional compliance costs, regulatory investigations and actions, and lawsuits.

If we are unable to use generative AI, it could make our business less efficient and result in competitive disadvantages.

If there is no lawful manner for us to transfer personal data internationally (such as from the EEA, the UK or other jurisdictions to the United States or from the United States to China or other countries of concern), or if the requirements for a legally-compliant transfer are too onerous, we could face significant adverse consequences, including the interruption or degradation of our operations, the need to relocate part of or all of our business or data processing activities to other jurisdictions (such as Europe) at significant expense, increased exposure to regulatory actions, substantial fines and penalties, the inability to transfer data and work with partners, vendors and other third parties, and injunctions against our processing or transferring of personal data necessary to operate our business.

Additionally, companies that transfer personal data internationally, including out of the EEA and UK to other jurisdictions, particularly to the United States, are subject to increased scrutiny from regulators, individual litigants, customers and partners, and activist groups.

Obligations related to data privacy and security (and consumers’ data privacy expectations) are quickly changing, becoming increasingly stringent, and creating uncertainty.

Additionally, these obligations may be subject to differing applications and interpretations, which may be inconsistent or conflict among jurisdictions.

Preparing for and complying with these obligations requires us to devote significant resources, which may necessitate changes to our services, information technologies, systems, and practices and to those of any third parties that process personal data on our behalf.

We may at times fail (or be perceived to have failed) in our efforts to comply with our data privacy and security obligations.

Moreover, despite our efforts, our personnel or third parties with whom we work may fail to comply with such obligations, which could negatively impact our business operations.

If we or the third parties with whom we work fail, or are perceived to have failed, to address or comply with applicable data privacy and security obligations, we could face significant consequences, including but not limited to:

government enforcement actions (e.g., investigations, fines, penalties, audits, inspections, and similar);

litigation (including class-action claims) and mass arbitration demands;

additional reporting requirements and/or oversight;

bans or restrictions on processing personal data;

or orders to destroy or not use personal data.

Any of these events could have a material adverse effect on our reputation, business, or financial condition, including but not limited to:

loss of customers;

inability to process personal data or to operate in certain jurisdictions;

limited ability to develop or commercialize our products;

expenditure of time and resources to defend any claim or inquiry;

adverse publicity;

or substantial changes to our business model or operations.

When our employees and personnel use generative artificial intelligence, agentic artificial intelligence, automated decision-making tools, or other artificial intelligence (collectively, “AI”) technologies to perform their work, we may be subject to various laws and regulations, such as those governing the specific application of AI technologies, the disclosure and use of personal data in generative AI technologies, or an individual’s interactions with AI technologies.

Governments have passed and are likely to pass additional laws regulating AI technologies.

Additionally, our use of AI technology could result in additional compliance costs, regulatory investigations and actions, and lawsuits.

Our use of AI technology also inherently results in increased risk to our information technology systems, infrastructure, and data.

If we are unable to use AI technologies, or if significant restrictions or limitations apply to our intended use of AI technologies, it could make our business less efficient and result in competitive disadvantages.

Obligations relating to the use of AI technologies are quickly changing, becoming increasingly stringent, and creating uncertainty.

Similarly, the known and foreseeable risks arising from the use of AI technologies are quickly changing, becoming increasingly severe or difficult to mitigate, and creating uncertainty.

Healthcare reforms by governmental authorities and related reductions in pharmaceutical pricing, reimbursement and coverage by third party payors may adversely affect our business.

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Changes in the healthcare system enacted as part of healthcare reform in the United States, as well as the increased purchasing power of entities that negotiate on behalf of Medicare, Medicaid, and private sector beneficiaries, may result in increased pricing pressure by influencing, for instance, the reimbursement policies of third party payors.

increase in the amount of rebates that manufacturers pay for coverage of their drugs by Medicaid programs may have an adverse effect on us.

While healthcare reform legislation, such as the ACA, may have increased the number of patients who are expected to have insurance coverage for our product candidates, provisions such as the assessment of a branded pharmaceutical manufacturer fee and an increase in the amount of rebates that manufacturers pay for coverage of their drugs by Medicaid programs may have an adverse effect on us.

It is uncertain how current and future reforms in these areas will influence the future of our business operations and financial condition.

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The IRA also eliminates the "donut hole" under the Medicare Part D program beginning in 2025 by significantly lowering the beneficiary maximum out-of-pocket cost and creating a new manufacturer discount program.

Additionally, on July 4, 2025, the OBBBA was signed into law, which is expected to reduce Medicaid spending and enrollment by implementing work requirements for some beneficiaries, capping state-directed payments, reducing federal funding, and limiting provider taxes used to fund the program.

The OBBBA also narrowed access to ACA marketplace exchange enrollment and declined to extend the ACA enhanced advanced premium tax credits that expired at the end of 2025, which, among other provisions in the law, are anticipated to reduce the number of Americans with health insurance.

Congress is considering proposed legislation intended to further reduce healthcare costs with alternatives to replace the expired ACA subsidies.

It is possible that the ACA will be subject to judicial or Congressional challenges in the future.

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Congressional inquiries and proposed federal legislation designed to, among other things, bring more transparency to product pricing, reduce the cost of certain products under Medicare, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies.

For example, the IRA, among other things (i) directs the U.S.

Department of Health and Human Services (“HHS”) to negotiate the price of certain high-expenditure, single-source drugs that have been on the market for at least 7 years covered under Medicare (the “Medicare Drug Price Negotiation Program”), and (ii) imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation.

These provisions began to take effect progressively in fiscal year 2023.

On August 15, 2024, HHS announced the agreed-upon prices of the first ten drugs that were subject to price negotiations, although the Medicare Drug Price Negotiation Program is currently subject to legal challenges.

On January 17, 2025, HHS selected fifteen additional drugs covered under Part D for price negotiation in 2025.

Each year thereafter, more Part B and Part D products will become subject to the Medicare Drug Price Negotiation Program.

For example, the IRA, among other things (i) directs the HHS to negotiate the price of certain high-expenditure, single-source drugs that have been on the market for at least 7 years covered under Medicare (the “Medicare Drug Price Negotiation Program”), and (ii) imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation.

Each year up to twenty (2) products will be selected by HHS for the Medicare Drug Price Negotiation Program.

Products subject to the Medicare Drug Price Negotiation Program are expected to experience a significant reduction in reimbursement from the Medicare program on a per unit basis.

Further, on December 7, 2023, an initiative to control the price of prescription drugs through the use of march-in rights under the Bayh-Dole Act was announced.

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Any new regulations or revisions or reinterpretations of existing regulations may impose additional costs or lengthen review times of any of our product candidates.

For example, the U.S.

Supreme Court’s June 2024 decision in Loper Bright Enterprises v.

Raimondo overturned the longstanding Chevron doctrine, under which courts were required to give deference to regulatory agencies’ reasonable interpretations of ambiguous federal statutes.

The Loper decision could result in additional legal challenges to regulations and decisions issued by federal agencies, including the FDA, on which we rely.

Any such legal challenges, if successful, could have a material impact on our business.

Additionally, the Loper decision may result in increased regulatory uncertainty, inconsistent judicial interpretations, and other impacts to the agency rulemaking process,

any of which could adversely impact our business and operations.

The current administration is pursuing policies to reduce regulations and expenditures across government including at HHS, the FDA, CMS and related agencies.

These actions, presently directed by executive orders or memoranda from the Office of Management and Budget, may propose policy changes that create additional uncertainty for our business.

For example, the current administration has announced agreements with several pharmaceutical companies that require the drug manufacturers to offer, through a direct to consumer platform, U.S.

patients and Medicaid programs prescription drug Most- Favored Nation pricing equal to or lower than those paid in other developed nations, with additional mandates for direct-to-patient discounts and repatriation of foreign revenues.

Other recent actions, for example, include (1) directives to reduce agency workforce and cut programs;

(2) directing HHS and other agencies to lower prescription drug costs through a variety of initiatives, including by improving upon the Medicare Drug Price Negotiation Program and establishing Most-Favored-Nation pricing for pharmaceutical products;

(3) imposing tariffs on imported pharmaceutical products;

and (4) as part of the Make America Healthy Again (“MAHA”) Commission’s recent Strategy Report, working across government agencies to increase enforcement on direct-to-consumer pharmaceutical advertising.

Additionally, the current administration recently called on Congress to enact “The Great Healthcare Plan,” to codify and expand Most-Favored Nation pricing, lower government subsidies to private insurance companies, increase healthcare price transparency, expand pharmaceutical drugs available for over-the-counter purchase, and enact restrictions on pharmacy benefit manager (PBM) payment methodologies, among other things.

These actions and policies may significantly reduce U.S.

drug prices, potentially impacting manufacturers’ global pricing strategies and profitability, while increasing their operational costs and compliance risks.

In June 2024, the U.S.

Supreme Court’s Loper Bright decision greatly reduced judicial deference to regulatory agencies, which could increase successful legal challenges to federal regulations affecting our operations.

We cannot determine what effect changes in regulations, statutes, legal interpretation or policies, when and if promulgated, enacted or adopted may have on our business in the future.

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Each of these would likely entail substantial time and cost and could adversely affect our business and our financial results.

We and our contract manufacturers are subject to significant regulation with respect to manufacturing of our product candidates.

The manufacturing facilities on which we rely may not continue to meet regulatory requirements and have limited capacity.

We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative or judicial action in the United States or any other jurisdiction.

If we or any third parties we may engage are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we or such third parties are not able to maintain regulatory compliance, our product candidates may lose any regulatory approval that may have been obtained and we may not achieve or sustain profitability

We and any of our contract manufacturers on which we rely or may rely in the future, are subject to significant regulation with respect to manufacturing of our product candidates.

The manufacturing facilities on which we rely, or may rely in the future, may not continue to meet regulatory requirements and have limited capacity.

We and the contract manufacturers for our product candidates are subject to extensive regulation.

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Changes in funding for the FDA and other government agencies could hinder their ability to hire and retain key leadership and other personnel, prevent new products and services from being developed or commercialized in a timely manner or otherwise prevent those agencies from performing normal functions on which the operation of our business may rely, which could negatively impact our business.

The ability of the FDA to review and approve new products can be affected by a variety of factors, including government budget and funding levels, ability to hire and retain key personnel and accept payment of user fees, and statutory, regulatory,

and policy changes.

Average review times at the agency have fluctuated in recent years as a result.

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Further, future government shutdowns could impact our ability to access the public markets and obtain necessary capital in order to properly capitalize and continue our operations.

In addition, the current administration has implemented substantial reductions in force at various government agencies including the FDA, and has implemented layoffs at the FDA, which could significantly reduce the FDA’s capacity to perform its functions in a manner consistent with its past practices and could delay reviews and negatively impact our business.

We are subject to various U.S.

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Compliance with Customs and Trade Controls may create delays in the introduction of our products in international markets or, in some cases, prevent the export of our products to some countries altogether.

Furthermore, Customs and Trade Controls may prohibit the provision of certain products and services to

countries, governments, and persons targeted by sanctions.

Furthermore, Customs and Trade Controls may prohibit the provision of certain products and services to countries, governments, and persons targeted by sanctions.

Although we have policies and procedures designed to address compliance with Customs and Trade Controls, actions by our employees, by third-party intermediaries or others acting on our behalf in violation of relevant laws and regulations may expose us to liability and penalties for violations of Customs and Trade Controls and accordingly may have a material adverse effect on our reputation and our business, financial condition and results of operations.

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As is the case with other companies in the markets in which we participate, our success is heavily dependent on intellectual property, particularly patents.

The strength of patents in the pharmaceutical field involves complex legal and scientific

questions and moreover in the United States and in many foreign jurisdictions patent policy, practice and case law continues to evolve and change and the issuance, scope, validity, enforceability and commercial value of our patent rights are highly uncertain.

The strength of patents in the pharmaceutical field involves complex legal and scientific questions and moreover in the United States and in many foreign jurisdictions patent policy, practice and case law continues to evolve and change and the issuance, scope, validity, enforceability and commercial value of our patent rights are highly uncertain.

This uncertainty includes changes to the patent laws through one or more of legislative action to change statutory patent law, rule changes and practice directions issued by National Patent Offices, or court action that may reinterpret, limit or expand on existing law in ways affecting the scope or validity of granted patents and what may be claimed in pending applications.

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The cost and burden to us of any patent litigation or other proceeding, even if resolved in our favor, could be substantial.

Some of our competitors may be able to sustain the costs of such litigation or proceedings more effectively

than we can because of their substantially greater financial resources.

Some of our competitors may be able to sustain the costs of such litigation or proceedings more effectively than we can because of their substantially greater financial resources.

Patent litigation and other proceedings may also absorb significant management time.

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These products may compete with our product candidates, if approved, and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing.

Moreover, competitors or others may raise legal challenges to our

intellectual property rights or may infringe upon our intellectual property rights, including through means that may be difficult to prevent or detect.

Moreover, competitors or others may raise legal challenges to our intellectual property rights or may infringe upon our intellectual property rights, including through means that may be difficult to prevent or detect.

Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions.

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We may be unable to enforce these agreements under the laws of the jurisdictions in which our employees work and it may be difficult for us to restrict our competitors from benefiting from the expertise our former employees or consultants developed while working for us.

Post-Merger organizational changes in connection with our business combination with Yarrow may add to the risk of employees departing to work for our competitors in jurisdictions where covenants not to compete are difficult to enforce.

Risks Related to the Ownership of Our Common Stock

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• publication of research reports about us or our industry or positive or negative recommendations or withdrawal of research coverage by securities analysts;

• announcements by us or our competitors of significant acquisitions, strategic partnerships or divestitures;

• announcements by us or our competitors of significant acquisitions, strategic partnerships, divestitures or mergers including the Merger;

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

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• the loss of or failure to obtain material intellectual property rights;

• our sale or proposed sale, or the sale by our significant stockholders, of our common stock or other securities in the future;

• our sale or proposed sale, or the sale by our significant stockholders, of our common stock or other securities in the future, including the issuance of our common stock in connection with the Merger;

• general political and economic conditions;

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• We indemnify our directors and officers for serving us in those capacities or for serving other business enterprises at our request, to the fullest extent permitted by Delaware law.

Delaware law provides that a corporation may indemnify

such person if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the registrant and, with respect to any criminal proceeding, had no reasonable cause to believe such person’s conduct was unlawful.

Delaware law provides that a corporation may indemnify such person if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the registrant and, with respect to any criminal proceeding, had no reasonable cause to believe such person’s conduct was unlawful.

• We may, in our discretion, indemnify employees and agents in those circumstances where indemnification is permitted by applicable law.

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If we fail to maintain proper and effective internal controls, our ability to produce accurate financial statements on a timely basis could be impaired.

We are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act and the rules and regulations of the Nasdaq Stock Market ("Nasdaq").

We are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act and the rules and regulations of Nasdaq.

The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting.

We must perform system and process evaluation and testing of our internal control over financial reporting to allow management to report on the effectiveness of our internal control over financial reporting in our Form 10-K filing each year, as required by Section 404 of the Sarbanes-Oxley Act.

This requires

that we incur substantial additional professional fees and internal costs within our accounting and finance functions and that we expend significant management efforts.

This requires that we incur substantial additional professional fees and internal costs within our accounting and finance functions and that we expend significant management efforts.

We may identify weaknesses in our system of internal financial and accounting controls and procedures that could result in a material misstatement of our financial statements.

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The impact of these events could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, on committees of our board of directors or as members of senior management.

We are not currently in compliance with the continued listing requirements for the Nasdaq Capital Market, to maintain a minimum closing bid price of $1.00 dollar per share, as set forth in Nasdaq Listing Rule 5550(a)(2), because the closing bid price of our Common Stock was below $1.00 per share for 30 consecutive business days.

If we do not regain compliance and continue to meet the continued listing requirements, our common stock may be delisted from the Nasdaq Capital Market, which could affect the market price and liquidity for our common stock and reduce our ability to raise additional capital and the Merger may not be consummated.

Our common stock is currently listed on the Nasdaq Capital Market.

On September 11, 2025, we received notice from Nasdaq that we are not in compliance with the requirement to maintain a minimum closing bid price of $1.00 per share, as set forth in Nasdaq Listing Rule 5550(a)(2), because the closing bid price of our common stock was below $1.00 per share for 30 consecutive business days.

Although the notification does not impact the listing of our common stock on the Nasdaq Capital Market at this time, we have until March 10, 2026 to regain compliance with the minimum bid price requirement.

We are considering all available options to regain compliance with the listing rule.

However, there can be no assurance that we will be able to regain compliance with the rule or will otherwise be in compliance with other Nasdaq listing criteria.

In the event we do not regain compliance by March 10, 2026, a second 180-day compliance period may be available if we provide written notice to Nasdaq that we intend to regain compliance with the bid price requirement during the second 180-day compliance period, by effecting a reverse stock split if necessary, and meet the $1 million market value of publicly held shares requirement for continued listing and all other initial inclusion requirements for the Nasdaq Capital Market, except for the bid price requirement.

If we do not qualify for the second compliance period or fail to regain compliance during the second 180-day period, then Nasdaq will notify us that our common stock is subject to delisting.

The perception among investors that we are at a heightened risk of delisting could negatively affect the market price and trading volume of our common stock.

If our common stock is delisted from Nasdaq, the delisting could:

substantially decrease trading in our common stock;

adversely affect the market liquidity of our common stock as a result of the loss of market efficiencies associated with Nasdaq and the loss of federal preemption of state securities laws;

adversely affect our ability to issue additional securities or obtain additional financing in the future on acceptable terms, if at all;

result in the potential loss of confidence by investors, suppliers, partners, and employees and fewer business development opportunities;

and result in limited news and analyst coverage.

Additionally, the market price of our common stock may decline further, and stockholders may lose some or all of their investment.

We are subject to risks related to climate change in the long term.

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If we do not meet, or are perceived not to meet, stakeholder expectations in key ESG areas, we risk negative stakeholder reaction, including from proxy advisory services, as well as damage to our brand and reputation, or other negative impacts on our business and operations.

While we monitor ESG matters, we cannot be

certain that we will manage such matters successfully, or that we will successfully meet the expectations of investors, employees, consumers, governments and other stakeholders.

While we monitor ESG matters, we cannot be certain that we will manage such matters successfully, or that we will successfully meet the expectations of investors, employees, consumers, governments and other stakeholders.

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 1A. Risk Factors