What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-02-27 compared with 2025-03-06 · 193 added, 244 removed, 652 unchanged (40% of the section changed)

6 unchanged sentences

Consolidated Statements of Operations and Comprehensive Loss

Consolidated Statements of Changes in Mezzanine Equity and Shareholders’ Equity

Consolidated Statements of Changes in Shareholders’ Equity

Consolidated Statements of Cash Flows

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We have audited the accompanying consolidated balance sheets of VYNE Therapeutics Inc.

(the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of operations and comprehensive loss, changes in mezzanine equity and shareholders’ equity, and cash flows for each of the two years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

(the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of operations and comprehensive loss, changes in shareholders’ equity, and cash flows, for each of the two years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2025 and 2024, and the consolidated results of its operations and its cash flows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

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Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion.

We believe that our audits provides a reasonable basis for our opinion.

Critical Audit Matters

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Tewksbury, Massachusetts

March 6, 2025

February 27, 2026

VYNE THERAPEUTICS INC.

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Cash and cash equivalents $ 24,027 $ 19,926

Restricted cash — 54

Investment in marketable securities (Note 6)

41,590 62,633

Prepaid and other current assets 1,002 2,921

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Total Current Liabilities 2,395 14,819

Long-term Liabilities :

Non-current operating lease liabilities (Note 9)

Other liabilities — 1,313

Total Long-term Liabilities — 1,412

Total Liabilities 2,395 14,819

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Loss from continuing operations ( 26,736 ) ( 39,807 )

Loss from discontinued operations, net of income taxes

( 27 ) ( 580 )

Income (loss) from discontinued operations, net of income taxes

$ ( 26,483 ) $ ( 39,834 )

Loss per share from continuing operations, basic and diluted $ ( 0.63 ) $ ( 0.93 )

Loss per share from discontinued operations, basic and diluted

$ — $ ( 0.06 )

Income per share from discontinued operations, basic and diluted

Loss per share, basic and diluted

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Weighted average shares outstanding - basic and diluted 42,768 42,589

Other comprehensive (loss) income:

Unrealized (losses) gains on marketable securities, net of tax of $ 0

Total other comprehensive (loss) income

Other comprehensive loss:

Unrealized losses on marketable securities, net of tax of $ 0

$ ( 18 ) $ ( 6 )

Total other comprehensive loss

Comprehensive loss $ ( 26,501 ) $ ( 39,840 )

1 unchanged sentence

VYNE THERAPEUTICS INC.

CONSOLIDATED STATEMENTS OF CHANGES IN MEZZANINE EQUITY AND SHAREHOLDERS' EQUITY

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

dollars in thousands)

Mezzanine Equity

(Convertible Preferred Stock) Common stock Additional paid-in

Common stock Additional paid-in

capital Accumulated

other comprehensive

income Accumulated deficit Total Shareholders' Equity

Number of shares Amounts Number of shares Amounts Amounts

income (loss)

Accumulated deficit Total Shareholders' Equity

Number of shares Amounts Amounts

BALANCE AT DECEMBER 31, 2023 14,098,888 $ 1 $ 780,044 $ 26 $ ( 691,336 ) $ 88,735

CHANGES DURING 2024:

Net loss — — — ( 39,834 ) ( 39,834 )

Vesting of restricted stock units, net of withholding for tax, and shares issued under employee share purchase plan 91,302 — ( 112 ) — — ( 112 )

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— — 3,303 — — 3,303

Redemption of convertible preferred stock

( 3,000 ) ( 211 ) — — — — ( 149 ) ( 149 )

Issuance of common stock in at-the-market offering, net of $ 5 in issuance costs

— — 34,589 — 156 — — 156

Issuance of common stock and pre-funded warrants in Private Placement, net of $ 5,486 in issuance costs

— — 10,652,543 1 82,664 — — 82,665

Cashless exercise of pre-funded warrants 639,823 — — — — —

— — 131,838 — — — — —

Unrealized gains from marketable securities

— — — — — 26 — 26

Net loss — — — — — — ( 28,452 ) ( 28,452 )

Unrealized losses from marketable securities — — — ( 6 ) — ( 6 )

BALANCE AT DECEMBER 31, 2024 14,830,013 $ 1 $ 783,235 $ 20 $ ( 731,170 ) $ 52,086

CHANGES DURING 2025:

Net loss — — — — ( 26,483 ) ( 26,483 )

Vesting of restricted stock units, net of withholding for tax, and shares issued under employee share purchase plan 199,682 — ( 128 ) — — ( 128 )

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Unrealized losses from marketable securities — — — ( 18 ) — ( 18 )

— — — — — ( 6 ) — ( 6 )

Net loss — — — — — ( 39,834 ) ( 39,834 )

BALANCE AT DECEMBER 31, 2025 33,323,171 $ 3 $ 785,413 $ 2 $ ( 757,653 ) $ 27,765

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Net loss $ ( 26,483 ) $ ( 39,834 )

Adjustments required to reconcile net loss to net cash used in

operating activities:

Adjustments required to reconcile net loss to net cash used in operating activities:

Share-based compensation

Amortization of premium or discount on marketable securities ( 778 ) ( 2,443 )

Unrealized (losses) gains on cash equivalents

Unrealized loss on cash equivalents

Changes in operating assets and liabilities:

Trade receivables, prepaid expenses and other current assets and operating lease right of use assets

Trade receivables, prepaid expenses and other assets and operating lease right of use assets

4,214 ( 899 )

Trade payables, accrued expenses, employee related obligations and other long-term liabilities

1 unchanged sentence

Operating lease liabilities

( 99 ) ( 114 )

Net cash used in operating activities ( 33,124 ) ( 33,972 )

1 unchanged sentence

Purchase of property and equipment

Proceeds from the sale of the MST Franchise — 5,000

Proceeds from the sale and maturity of marketable securities

68,300 84,000

Purchases of marketable securities ( 30,932 ) ( 60,518 )

Net cash provided by (used in) investing activities

Net cash provided by investing activities

37,368 23,365

Cash Flows From Financing Activities:

Proceeds related to the issuance of common shares and pre-funded warrants through private placement, net of issuance costs — 82,665

Proceeds related to the issuance of common shares through at-the-market offerings, net of issuance costs — 156

Redemption of convertible preferred stock

Withholdings from exercise of options and issuance of shares for share-based compensation arrangements, net

Withholdings from exercise of options and issuance of shares for stock-based compensation arrangements, net ( 143 ) ( 141 )

Net cash used in financing activities

( 143 ) ( 141 )

Net cash (used in) provided by financing activities

Increase (decrease) in cash and cash equivalents

4,101 ( 10,748 )

Decrease in cash, cash equivalents and restricted cash ( 10,748 ) ( 301 )

Cash, cash equivalents and restricted cash at beginning of the year 30,674 30,975

Cash, cash equivalents and restricted cash at end of the year $ 19,926 $ 30,674

Cash and cash equivalents 19,926 30,620

Restricted cash — 54

Total cash, cash equivalents and restricted cash $ 19,926 $ 30,674

VYNE THERAPEUTICS INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

dollars in thousands)

Year ended December 31,

Cash and cash equivalents at beginning of the year

19,926 30,674

Cash and cash equivalents at end of the year

$ 24,027 $ 19,926

Supplementary information on investing and financing activities not involving cash flows:

Accretion of preferred stock $ — $ 149

Issuance of vested shares under employee share purchase plan

Additions to operating lease right of use assets $ — $ 207

Additions to operating lease liabilities $ — $ 214

The accompanying notes are an integral part of these consolidated financial statements.

VYNE THERAPEUTICS INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands, except share and per share amounts)

NOTE 1 - NATURE OF OPERATIONS

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VYNE Therapeutics Inc.

(the "Company") is a clinical-stage biopharmaceutical company focused on developing differentiated therapies to treat chronic inflammatory and immune-mediated conditions with high unmet need.

(the "Company") is a clinical-stage biopharmaceutical company focused on developing differentiated therapies to treat inflammatory and immune-mediated conditions with high unmet need.

The Company has exclusive worldwide rights to research, develop and commercialize products containing small molecule bromodomain and extra-terminal domain (“BET”) inhibitors for the treatment of any disease, disorder or condition in humans, which the Company licensed from Tay Therapeutics Ltd., formerly known as In4Derm Ltd ("Tay").

Through the Company’s access to this library of new small molecule BET inhibitors, which comprise the Company's InhiBET™ portfolio, the Company plans to develop product candidates for a diverse set of therapeutic indications.

Through its transaction with Tay, the Company obtained access to a library of new small molecule BET inhibitor compounds, including those that inhibit both BD1 and BD2 (“pan-BD” BET inhibitor) and that selectively inhibit BD2 (“BD2-selective” BET inhibitor).

Through its access to this library of new small molecule BET inhibitors, the Company plans to develop product candidates for a diverse set of therapeutic indications.

The Company has chosen to initially focus its development efforts with these molecules on immune-mediated inflammatory diseases, which are not being targeted by current BET inhibitors in development.

The Company’s lead program is repibresib gel (also known as VYN201), a topically administered, small molecule pan-BD BET inhibitor designed as a “soft” drug to address diseases involving multiple, diverse inflammatory cell signaling pathways while providing low systemic exposure.

In preclinical testing, repibresib produced consistent reductions in pro-inflammatory and disease-related biomarkers and improvements in disease severity across a variety of inflammatory and fibrotic preclinical models.

The Company is currently evaluating repibresib gel in a Phase 2b trial for the treatment of NSV.

The Company’s second program is VYN202, an oral, small molecule BD2-selective BET inhibitor.

VYNE is developing VYN202, an oral, small molecule BD2-selective BET inhibitor.

VYN202 has been designed to achieve potential class-leading potency and selectivity for BD2 vs.

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The Company initiated a Phase 1b trial in February 2025 in adult subjects with moderate-to-severe plaque psoriasis.

The Company intends to advance its product candidates through further phases of clinical development toward regulatory approval.

As part of the strategy to maximize the value of the pipeline, the Company may partner with larger pharmaceutical companies to expand and accelerate the development of programs and explore other indications and therapeutic areas outside of the core focus in immune-mediated diseases.

In April 2025, the FDA verbally placed a clinical hold on the Company’s Phase 1b trial evaluating VYN202 in subjects with moderate-to-severe plaque psoriasis following an observation of testicular toxicity in dogs from a non-clinical toxicology study of VYN202.

In June 2025, the FDA lifted the clinical hold for two doses of VYN202 for female subjects and indicated that sufficient data from a 12-week non-clinical toxicology study of VYN202 in dogs would be required in order to resume studies in male clinical subjects.

Following the clinical hold, the Company made the decision to unblind the clinical data from the subjects who were enrolled in the trial.

Based on interim unblinded clinical data from the Phase 1b trial, together with promising results from multiple preclinical models, the Company terminated the Phase 1b psoriasis trial in support of continued advancement of VYN202 into other serious, immune-mediated diseases with more limited effective treatment options.

In October 2025, we initiated the repeat non-clinical toxicology study of VYN202 in male dogs to remedy the partial hold in male clinical subjects.

The study is expected to be completed in the second half of 2026, with a final report expected in the fourth quarter of 2026.

Until July 2025, the Company's lead product was repibresib gel (also known as VYN201), a topically administered, small molecule pan-bromodomain (“BD”) BET inhibitor designed as a “soft” drug to address diseases involving multiple, diverse inflammatory cell signaling pathways while providing low systemic exposure.

The Company announced positive results from a Phase 1b trial evaluating repibresib in nonsegmental vitiligo in October 2023 and initiated a Phase 2b trial in nonsegmental vitiligo in June 2024.

In July 2025, the Company announced that the trial 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.

Based on these data, the Company discontinued the ongoing extension phase of the trial and terminated the trial.

In August 2025, our board of directors initiated a strategic review to evaluate a range of options to maximize stockholder value, including the assessment of our internal pipeline, financing opportunities and strategic alternatives.

Following the strategic review, we entered into an Agreement and Plan of Merger and Reorganization, dated as of December 17, 2025, which was amended on January 30, 2026 (as amended, the "Merger Agreement") with Yarrow Biosciences, Inc.

("Yarrow"), pursuant to which among other matters, Yellow Merger Sub Corp., a direct, wholly owned subsidiary of ours ("Merger Sub"), will merge with and into Yarrow, with Yarrow surviving as a wholly owned subsidiary of VYNE and the surviving corporation of the merger (the "Merger").

Following the completion of the Merger, the current business of Yarrow will become the Company’s primary business.

As such, we may continue to evaluate opportunities for repibresib and VYN202 prior to the closing of the Merger, which may include a sale, license, transfer, disposition, divestiture or other monetization transaction to a third party or to a related party so long as the transaction would not result in material post-closing obligations to the Company without Yarrow’s consent.

For additional information regarding the sale of the Company's legacy commercial business (the "MST Franchise") to Journey Medical Corporation ("Journey") in January 2022 and the Company's licensing arrangements with Tay, see "Note 3—Strategic Agreements."

The Company is a Delaware corporation, has its principal executive offices in Bridgewater, New Jersey and operates as one business segment.

Reverse stock split and recasting of per-share amounts

On February 8, 2023, the Company's board of directors approved a 1-for-18 reverse stock split of its outstanding shares of common stock.

The reverse stock split was effected on February 10, 2023 at 5:01 p.m.

Eastern time.

At the effective time, every 18 issued and outstanding shares of the Company's common stock were converted into one share of common stock.

No fractional shares were issued in connection with the reverse stock split, and in lieu thereof, each holder of fractional shares was entitled to receive a cash payment (without interest or deduction) from the Company's transfer agent in an amount equal to such holder’s respective pro rata share of the total net proceeds from the Company’s transfer agent's sale of all fractional shares at the then-prevailing prices on the open market.

A proportionate adjustment was also made to the maximum number of shares issuable under the Company’s 2019 Equity Incentive Plan, 2018 Omnibus Incentive Plan and 2019 Employee Share Purchase Plan.

The number of authorized shares of the Company's common stock and the par value of each share of common stock remained unchanged.

Unless noted, all common shares and per share amounts contained in the consolidated financial statements have been retroactively adjusted to reflect the 1-for-18 reverse stock split.

Securities Purchase Agreement

On October 27, 2023, the Company entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with certain institutional and other accredited investors (collectively, the “Purchasers”), pursu ant to which the Company agreed to sell and issue to the Purchasers in a private placement transaction (the “Private Placement”) (i) 10,652,543 shares of the Company’s common stock and (ii) with respect to certain Purchasers, pre-funded warrants to purchase 28,614,437 shares of common stock in lieu of shares (the “Pre-Funded Warrants”).

The purchase price per share of common stock was $ 2.245 per share (the “Stock Purchase Price”) and the purchase price for the Pre-Funded Warrants was the Stock Purchase Price minus $ 0.0001 per Pre-Funded Warrant.

On November 1, 2023, the Company received gross proceeds of $ 88.2 million from the Private Placement, before deducting fees to the placement agent and offering expenses payable by the Company.

This transaction resulted in $ 5.5 million of issuance costs and net proceeds of $ 82.7 million as of December 31, 2023.

The Company is a Delaware corporation and operates as one business segment.

Its previous principal executive office was in Bridgewater, New Jersey, however, starting November 1, 2025, the Company operates on a fully remote model.

The Proposed Merger

The Merger Agreement

Following the strategic review described above, on December 17, 2025, the Company entered into the Merger Agreement with Yarrow, a privately held biotechnology company advancing YB-101 (also known as GS-098), a clinical-stage, humanized monoclonal antibody targeting the thyroid-stimulating hormone receptor for the treatment of Graves’ disease and thyroid eye disease, pursuant to which Yarrow will become a wholly owned subsidiary of VYNE and VYNE will operate under the name Yarrow Bioscience, Inc.

following the Merger.

The Company anticipates that the Merger will close in the second quarter of 2026, subject to certain closing conditions, along with the concurrent Yarrow Pre-Closing Financing (as described below).

Following the Merger, the current business of Yarrow will become the primary business.

Yarrow Series A Preferred Stock Financing

In connection with the execution of the Merger Agreement, certain institutional and accredited investors (the "Series A Investors"), led by an affiliate of RTW Investments and Yarrow entered into a Series A stock purchase agreement, pursuant to which such persons invested in and purchased an aggregate of 20,242,911 shares of Yarrow Preferred Stock at a purchase price of $ 4.94 per share for aggregate gross proceeds to Yarrow of $ 100.0 million.

Yarrow Pre-Closing Financing

Concurrently with the execution and delivery of the Merger Agreement, the Series A Investors also entered into the Securities Purchase Agreement with Yarrow, pursuant to which such investors have agreed to purchase, immediately prior to the Merger, shares of Yarrow common stock or, in lieu thereof, Yarrow pre-funded warrants, representing an aggregate commitment of approximately $ 100.0 million in the Yarrow Pre-Closing Financing.

The shares of Yarrow common stock and Yarrow pre-funded warrants that are issued in the Yarrow Pre- Closing Financing will be or will have the right to be, respectively, converted into shares of VYNE common stock in the Merger.

The Securities Purchase Agreement contains customary representations and warranties of Yarrow and also contains customary representations and warranties of the purchaser parties thereto.

The Securities Purchase Agreement also contemplates Yarrow and the investors participating in the Yarrow Pre-Closing Financing entering into a registration rights agreement at the closing of the Yarrow Pre-Closing Financing, pursuant to which, among other things, the Combined Company will agree to provide for the registration and resale of certain shares of VYNE common stock that are held by the investors participating in the Yarrow Pre-Closing Financing from time to time pursuant to Rule 415.

Pre-Closing Special Cash Dividend

Further, prior to the closing of the Merger, the Company expects to declare and set aside the aggregate cash amount to be paid in accordance with a special cash dividend (the “special cash dividend”) to holders of record of outstanding shares of the Company's common stock as of a record date prior to the effective time of the Merger, to be determined by the board of directors.

The ex-dividend date in respect of such special cash dividend will be determined by Nasdaq.

The Company's stockholders of record prior to the ex-dividend date will be entitled to receive the special cash dividend, regardless of whether they beneficially own such shares as of the dividend date.

The amount of the special cash dividend is expected to be approximately $ 14.5 million to $ 16.5 million in the aggregate.

Liquidity and Capital Resources

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For the year ended December 31, 2025, the Company incurred a net loss of $ 26.5 million and used $ 33.1 million of cash in operations.

Other than in connection with its legacy commercial business that was sold in January 2022, the Company has funded its operations primarily through private and public placements of its equity, debt and warrants and through fees, cost reimbursements and payments received from its licensees.

The Company has incurred losses and experienced negative operating cash flows since its inception and anticipates that it will continue to incur losses until such a time when its product candidates, if approved, are commercially successful, if at all.

The Company will not generate any revenue from any current or future product candidates unless and until it obtains regulatory approval and commercializes such products.

If the Company's available cash, cash equivalents and marketable securities are insufficient to satisfy its liquidity requirements, the Company may need to raise additional capital to fund its operations.

The Company's primary uses of capital were historically compensation and related expenses, research and development costs, legal and other regulatory expenses and general overhead costs.

In anticipation of the Merger with Yarrow, the Company has suspended and is winding down its research and development activities, operations are limited and the Company expects that expenses, other than those related to the Merger, will decrease significantly.

The Company's future operations are highly dependent on the success of the proposed Merger with Yarrow.

If the Merger is not completed, the Company may pursue other strategic alternatives, including financing opportunities, or liquidation.

In order to continue the development of VYN202 or any future product candidates, the Company will require substantial additional capital.

Accordingly, the Company may seek to raise any necessary additional capital to fund its operations.

No assurance can be given as to whether additional needed financing will be available on terms acceptable to the Company, if at all.

If sufficient funds on acceptable terms are not available when needed, the Company may be required to suspend or forego certain planned activities.

If sufficient funds on acceptable terms are not available when needed, the Company may be required to suspend or forego certain planned activities or liquidate.

Failure to manage discretionary spending or raise additional financing, as needed, would adversely impact the Company’s ability to achieve its intended business objectives and have an adverse effect on its results of operations and future prospects.

In addition, t he amount of proceeds the Company may be able to raise pursuant to its shelf registration statement on Form S-3 is limited.

As of the filing of this Annual Report on Form 10-K, the Company is subject to the general instructions of Form S-3 known as the "baby shelf rules." Under these rules, the amount of funds the Company can raise through primary public offerings of securities in any 12-month period using its registration statement on Form S-3 is limited to one-third of the aggregate market value of the shares of the Company's common stock held by its non-affiliates.

As of the filing of this Annual Report, the Company is subject to the general instructions of Form S-3 known as the "baby shelf rules." Under these rules, the amount of funds the Company can raise through primary public offerings of securities in any 12-month period using its registration statement on Form S-3 is limited to one-third of the aggregate market value of the shares of the Company's common stock held by its non-affiliates.

Therefore, the Company will be limited in the amount of proceeds it is able to raise by selling shares of common stock using its Form S-3 until such time as the Company's public float exceeds $ 75.0 million.

In accordance with Accounting Standards Codification (“ASC”) Subtopic 205-40, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, the Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that its audited consolidated financial statements are issued.

As of the report date, the Company believes its existing cash, cash equivalents and marketable securities are sufficient to fund its operating and capital expenditure requirements through the closing of the contemplated Merger, which is subject to approval by the Company's stockholders and the stockholders of Yarrow and other customary closing conditions, and for a period of at least 12 months from the date of issuance of these audited consolidated financial statements.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

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The Company considers cash equivalents to be all short-term, highly liquid investments, which include short-term bank deposits, treasury bills and money market funds with original maturities of three months or less from the date of purchase that are not restricted as to withdrawal or use and are readily convertible to known amounts of cash.

Restricted Cash

As of December 31, 2024 and 2023, the Company had no and less than $ 0.1 million of restricted cash, respectively, representing bank guarantees.

Marketable securities

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The Company evaluates its allowance based on expected losses rather than incurred losses, which is known as the current expected credit loss (“CECL”) model.

The allowance is determined using the loss rate approach and is measured on a collective (pool) basis when similar risk characteristics exist.

The allowance is determined usin g the loss rate approach and is measured on a collective (pool) basis when similar risk characteristics exist.

Where financial instruments do not share risk characteristics, they are evaluated on an individual basis.

The allowance is based on relevant available information, from internal and external sources,

relating to past events, current conditions, and reasonable and supportable forecasts.

T rade receivable balances are written off against the allowance when it is deemed probable that the receivable will not be collected.

The allowance is based on relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts.

Trade receivable balances are written off against the allowance when it is deemed probable that the receivable will not be collected.

Trade receivables, net are stated net of reserves for certain sales allowances and credit losses.

Credit losses were not material for the years ended December 31, 2025 and 2024.

The Company's lease portfolio mainly consists of office space.

The Company's lease portfolio previously consisted of office space.

Leases are classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement.

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Revenue recognition

The Company accounts for its revenue transactions under Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 606, Revenue from Contracts with Customers .

The Company accounts for its revenue transactions under Financial Accounting Standards Board ("FASB"), ASC, Topic 606, Revenue from Contracts with Customers .

In accordance with ASC Topic 606, the Company recognizes revenues when its customers obtain control of its product for an amount that reflects the consideration it expects to receive from its customers in exchange for that product.

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

and (v) recognize revenue when (or as) the Company satisfies

the performance obligation.

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

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

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The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when such performance obligation is satisfied.

Following the disposition of the MST Franchise in January 2022, the Company does not have any revenue generating products;

however, the Company may receive royalty revenues from the sale of specified products (see "Note 4—Discontinued Operations").

Following the disposition of the MST Franchise in January 2022, the Company does not have any revenue generating products (see "Note 4—Discontinued Operations");

however, the Company may receive royalty revenues from the sale of specified products.

Royalty Revenues and Collaboration Agreements

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The Company periodically reviews estimated periods of performance based on the progress under each arrangement and accounts for the impact of any changes in estimated periods of performance on a prospective basis.

Milestone payments are a form of variable consideration as the payments are contingent upon achievement of a substantive

Milestone payments are a form of variable consideration as the payments are contingent upon achievement of a substantive event.

Milestone payments are estimated and are included in the transaction price when the Company determines that it is probable that there will not be a significant reversal of cumulative revenue recognized in future periods.

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All other provisions, including rebates, other discounts and return provisions are reflected as a liability within accrued expenses on the consolidated balance sheet.

The revenue reserve liability was $ 2.1 million and $ 2.3 million as of December 31, 2024 and 2023, respectively.

The revenue reserve liability was $ 2.1 million as of December 31, 2024.

No revenue reserve liability existed as of December 31, 2025.

Under the terms of the Asset Purchase Agreement, the Company retained and is responsible for historical liabilities of the commercial business operations based on events occurring prior to the sale other than those liabilities expressly assumed by Journey.

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Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws.

A valuation allowance is recognized to the extent

that it is more likely than not that the deferred taxes will not be realized in the foreseeable future.

A valuation allowance is recognized to the extent that it is more likely than not that the deferred taxes will not be realized in the foreseeable future.

Given the Company’s losses, the Company has provided a full valuation allowance with respect to its deferred tax assets.

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If this threshold is met, the second step is to measure the tax position as the largest amount that has more than a 50% likelihood of being realized upon ultimate settlement.

The Company’s net operating loss ("NOL") carryforwards are subject to annual limitations imposed by Section 382 of the Internal Revenue Code.

The Company completed a Section 382 study through March 31, 2025, identifying ownership changes in connection with the 2020 merger between Menlo Therapeutics (the Company's predecessor company) and Foamix Pharmaceuticals Ltd.

and with the private placement transaction in November 2023.

These ownership changes resulted in federal NOLs expected to expire unutilized.

One Big Beautiful Bill Act ("OBBBA")

On July 4, 2025, the President signed H.R.

1, the “One Big Beautiful Bill Act,” into law.

The legislation includes several changes to federal tax law that provide more favorable deductibility of certain business expenditures beginning in 2025, including the restoration of immediate expensing for domestic research and development expenditures, the reinstatement of 100% bonus depreciation, and modifications to the limitation on business interest expense.

The enactment of this legislation did not have a material impact on the Company’s income tax provision for the year ended December 31, 2025.

Net loss per share

1 unchanged sentence

Diluted net loss per share is based upon the weighted average number of shares of common stock and of common stock equivalents outstanding when dilutive.

The Company has issued the Pre-Funded Warrants, which do not expire until they are exercised in full (see "Note 12— Mezzanine Equity and Shareholder's Equity").

The Company has issued the Pre-Funded Warrants, which do not expire until they are exercised in full (see "Note 12—Shareholder's Equity").

Pursuant to the guidance of ASC 260-10, the Company concluded that because the equity-classified Pre-Funded Warrants were immediately exercisable for little or no cash consideration, due to the non-substantive exercise price, all of the necessary conditions for issuance of the underlying shares of common stock had been met when the Pre-Funded Warrants were issued.

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Existing royalty receivables relate to one customer, but do not present a credit risk due to their immaterial nature.

There was no restricted cash as of December 31, 2024, thereby presenting no credit risk.

Employee Retention Tax Credit

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As there is no authoritative guidance under U.S.

GAAP on accounting for government assistance to for-profit business entities, the

Company has accounted for the ERTC by analogy to International Accounting Standard, Accounting for Government Grants and Disclosure of Government Assistance (“IAS 20”).

The ERTC filings remain open to examination by the IRS until April 2025, and as such the Company has recorded the $ 1.3 million received within other current liabilities on the consolidated balance sheet as of December 31, 2024 until such a time that the Company has reasonable assurance that the conditions associated with the grants have been met.

GAAP on accounting for government assistance to for-profit business entities, the Company has accounted for the ERTC by analogy to International Accounting Standard, Accounting for Government Grants and Disclosure of Government Assistance (“IAS 20”).

The IRS examination of the ERTC filings was closed in April 2025.

As a result, $ 1.3 million of other income was recognized on the consolidated statement of operations and comprehensive loss for the year ended December 31, 2025, in conjunction with the expiration of the statute of limitations associated with the previously accrued amount.

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

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Recent Accounting Guidance Issued

In June 2016, the FASB issued ASU No.

2016-13, “Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments ” (ASU 2016-13), which requires companies to measure credit losses of financial instruments, including customer accounts receivable and marketable securities, utilizing a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates.

Subsequent to the issuance of ASU 2016-13, the FASB issued several additional ASUs to clarify implementation guidance, provide narrow-scope improvements and provide additional disclosure guidance.

As a smaller reporting company, the Company adopted ASU 2016-13 effective January 1, 2023, and there was no material impact on the consolidated financial statements upon adoption.

In December 2023, the FASB issued ASU No.

2022-06, " Reference Rate Reform (Topic 848):

Deferral of the Sunset Date of Topic 848" (ASU 2022-06), which provides extension of the sunset date of Topic 848 from December 31, 2022 to December 31, 2024.

The Company is currently evaluating the impact of ASU 2020-04 and ASU 2022-06 on its consolidated financial statements.

Currently, the Company does not expect the adoption of the new standard to have a material impact to the consolidated financial statements.

In November 2023, the FASB issued ASU No.

2023-07, "Segment Reporting (Topic 280)—Improvements to Reportable Segment Disclosures" (ASU 2023-07), to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

The amendments are effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 31, 2024.

The Company adopted the standard as of December 31, 2024.

See Note 15 in the accompanying notes to the consolidated financial statement for further information.

In December 2023, the FASB issued ASU No.

2023-09, " Income Taxes (Topic 740)—Improvements to Income Tax Disclosures " ("ASU 2023-09"), which is intended to enhance the transparency and decision usefulness of income tax disclosures.

Public business entities are required to adopt this standard for annual fiscal periods beginning after December 31, 2024 and early adoption is permitted.

The Company is evaluating the impact the adoption of this guidance will have on its consolidated financial statements and related disclosures.

The Company adopted the standard as of December 31, 2025 (see "Note 14 - Income Tax").

In November 2024, the FASB issued ASU No.

2024-03, "Comprehensive Income (Topic 220)—Disaggregation of Income Statement Expenses" ("ASU 2024-03"), to improve financial reporting by requiring disclosures in the notes to financial

statements about specific types of expenses included in the expense captions presented on the face of the statement of operations.

2024-03, "Comprehensive Income (Topic 220)—Disaggregation of Income Statement Expenses" ("ASU 2024-03"), to improve financial reporting by requiring disclosures in the notes to financial statements about specific types of expenses included in the expense captions presented on the face of the statement of operations.

The requirements of the ASU, as clarified by ASU 2025-01 issued in January 2025, are effective for annual reporting periods beginning after December 15, 2026 and for interim reporting periods beginning after December 15, 2027, with early adoption permitted.

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The Company is evaluating the impact the adoption of this guidance will have on its consolidated financial statements and related disclosures.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments – Credit Losses (Topic 326) – Measurement of Credit Losses for Accounts Receivable and Contract Assets , to introduce a practical expedient to calculating current expected credit loss by assuming that the current conditions as of the balance sheet date will not change for the remaining life of the asset.

This expedient can only be applied to current accounts receivable and current contract assets.

This update is effective for annual reporting periods beginning after December 15, 2025 and interim periods within those annual periods, and this update is applied prospectively.

Early adoption is permitted in both interim and annual periods in which financials have not been issued.

The Company is evaluating the impact the adoption of this guidance will have on its consolidated financial statements and related disclosures.

NOTE 3 - STRATEGIC AGREEMENTS

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Under the terms of the Option Agreement, the Company's option (the "Oral Option") with respect to the Oral BETi Compounds was to expire on June 30, 2022 (the "Option Term"), but in June 2022, the Company and Tay entered into a Letter Agreement (the “Letter Agreement”) to extend the Option Term to February 28, 2023.

Pursuant to the terms of the Letter Agreement, the Company paid Tay $ 386,366 (£ 300,000 ) on June 28, 2022 to extend the Option Term.

In addition, on August 29, 2022, the Company made a second payment to Tay of $ 997,407 (£ 850,000 ) pursuant to the terms of the Letter Agreement following the discovery of potential Oral BETi Compounds for further development.

Both payments were recorded as research and development expense.

On February 27, 2023, the parties entered into an additional Letter Agreement (the "Second Letter Agreement") pursuant to which the Option Term was extended to April 30, 2023.

As consideration for the extension of the Option Term, the Company paid Tay $ 250,000 upon the execution of the Second Letter Agreement.

Per the terms of the Second Letter Agreement, this fee was deducted from the upfront fee paid by the Company to Tay following the Company's exercise of the Oral Option, as described below.

In February 2023, the parties entered into an additional Letter Agreement (the "Second Letter Agreement") pursuant to which the Option Term was further extended to April 30, 2023.

The Company exercised the Oral Option for VYN202 on April 28, 2023.

License for Locally Administered Pan-BD BET Inhibitor Program (Repibresib)

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Pursuant to the Repibresib License Agreement, the Company has agreed to make cash payments to Tay of up to $ 15.75 million

upon the achievement of specified clinical development and regulatory approval milestones with respect to each licensed topical product in the United States for all indications, of whic h $ 1.8 million h as been paid or accrued through December 31, 2024.

upon the achievement of specified clinical development and regulatory approval milestones with respect to each licensed topical product in the United States for all indications, of which $ 1.8 million has been paid or accrued through December 31, 2025.

Tay is entitled to additional milestone payments upon the achievement of regulatory approvals in certain non-U.S.

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In addition, with respect to any products the Company commercializes under the Repibresib License Agreement, the Company will pay tiered royalties to Tay on net sales of such licensed products by the Company, its affiliates, or sublicensees, of 5 %, 7.5 % and 10 % based on tiered annual net sales bands subject to specified reductions.

The Company is

obligated to pay royalties until the latest of (1) the tenth anniversary of the first commercial sale of the relevant licensed product, (2) the expiration of the last valid claim of the licensed patent rights covering such licensed product in such country and (3) the expiration of regulatory exclusivity for the relevant licensed product in the relevant country, on a licensed product-by-licensed product and country-by-country basis.

The Company is obligated to pay royalties until the latest of (1) the tenth anniversary of the first commercial sale of the relevant licensed product, (2) the expiration of the last valid claim of the licensed patent rights covering such licensed product in such country and (3) the expiration of regulatory exclusivity for the relevant licensed product in the relevant country, on a licensed product-by-licensed product and country-by-country basis.

Pursuant to the Repibresib License Agreement, VYNE was granted a sublicense under certain intellectual property which was licensed to Tay by the University of Dundee (“Dundee”) pursuant to a certain license agreement between Tay and Dundee effective as of July 24, 2020 and amended and restated on October 8, 2021 (the “Head License”).

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Pursuant to the License Agreement, a joint development committee consisting of one representative from each party reviews the progress of the development plan for the licensed products.

The Company made a cash payment of $ 3.75 million, after deducting the $ 250,000 paid in February 2023, to Tay in connection with entering into the VYN202 License Agreement.

The Company made a cash payment of $ 3.75 million, after deducting the $ 0.25 million paid in February 2023, to Tay in connection with entering into the VYN202 License Agreement.

This payment was recorded as a research and development expense in the period paid.

Pursuant to the terms of the VYN202 License Agreement, the Company agreed to make cash payments to Tay of up to $ 43.75 million upon the achievement of specified clinical development and regulatory approval milestones with respect to each licensed oral product in the United States for all indications, of which $ 2.3 million has been paid or accrued through December 31, 2025.

In August 2025, the Company paid Tay $ 1.0 million in partial satisfaction of the "Phase 2 Milestone" under the VYN202 License Agreement for the initiation of the Phase 1b trial in psoriasis.

The VYN202 License Agreement was also amended in August 2025 to provide that upon initiation of a new clinical trial in a target patient population involving VYN202 for oral administration with an efficacy endpoint, regardless of the trial's phase designation or regulatory classification, the Company shall pay Tay the remaining $ 4.0 million amount under the "Phase 2 Milestone." All other terms of the VYN202 License Agreement were unchanged.

Tay is entitled to additional milestone payments upon the achievement of regulatory approvals in certain non-U.S.

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In accordance with ASC 205-20, only expenses specifically identifiable and related to a business to be disposed may be presented in discontinued operations.

As such, the general and administrative expenses in discontinued operations include corporate costs incurred directly to solely support the MST Franchise.

The negative product sales for the year ended December 31, 2023 was primarily attributable to a change in the product returns provision following the sale of the MST Franchise.

Historically, research and development, marketing, and general and administrative expenses in discontinued operations included corporate costs incurred directly to solely support the MST Franchise.

The following table presents the combined results of discontinued operations of the MST Franchise:

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Total operating expenses 20 27

Loss from discontinued operations, before taxes

( 27 ) ( 580 )

Income (loss) from discontinued operations, before taxes

Income tax expense — —

Net loss from discontinued operations

Net income (loss) from discontinued operations

$ 253 $ ( 27 )

The product sales, net for the year ended December 31, 2025 was primarily attributable to the partial reversal of the return reserve upon final reconciliation with the wholesalers.

There were no non-cash items related to discontinued operations for the years ended December 31, 2025 and 2024.

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NOTE 5 - FAIR VALUE MEASUREMENTS

The Company’s financial assets that are measured at fair value as of December 31, 2024 and 2023 are classified in the tables below in one of the three categories described in "Note 2(p)—Fair value measurement" above:

The Company’s financial assets that are measured at fair value as of December 31, 2025 and 2024 are classified in the tables below in one of the three categories described in "Note 2(o)—Fair value measurement" above:

December 31, 2025

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Treasury bills.

The following tables sets forth the Company’s marketable securities:

The following tables set forth the Company’s marketable securities:

(in thousands) 2025 2024

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NOTE 7 - PROPERTY AND EQUIPMENT

The following table sets forth the Company's property and equipment, net as of December 31, 2024:

The following table sets forth the Company's property and equipment, net as of December 31, 2025 and 2024:

(in thousands) 2025 2024

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Property and equipment, net

The Company had no property and equipment as of December 31, 2023.

Depreciation expense totaled $ 4 thousand and $ 0 for the years ended December 31, 2024 and 2023, respectively, which is included within general and administrative expenses on the consolidated statements of operations and comprehensive loss.

Depreciation expense totaled $ 23 thousand and $ 4 thousand for the years ended December 31, 2025 and 2024, respectively, which is included within general and administrative expenses on the consolidated statements of operations and comprehensive loss.

FOAMIX PHARMACEUTICALS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

dollars in thousands, except share and per share amounts)

NOTE 8 - ACCRUED EXPENSES

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Product sales provisions (1)

$ 2,107 $ 2,250

Research and development (2)

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NOTE 9 – OPERATING LEASE

As of December 31, 2024, the Company had an operating lease for its principal executive office in Bridgewater, New Jersey.

In November 2022, the Company transitioned to a smaller corporate headquarters and signed a Sublease Agreement (the “Sublease”) to sublease approximately 5,755 square feet of office space (the “Leased Premises”) in Bridgewater, New Jersey through September 30, 2023.

The Company previously had an operating lease for its principal executive office in Bridgewater, New Jersey.

As of December 31, 2025, the Company had no remaining lease commitments.

In November 2022, the Company signed a Sublease Agreement (the “Sublease”) to sublease approximately 5,755 square feet of office space (the “Leased Premises”) in Bridgewater, New Jersey through September 30, 2023.

Following the termination of the Sublease, the Company signed a Lease Agreement (the “Master Lease”) to lease the Leased Premises through September 30, 2025.

The Company recorded a right of use asset of $ 0.2 million and liability of $ 0.3 million at the commencement date of the Master Lease on October 1, 2023.

The Master Lease was subsequently extended to October 31, 2025, and the Company vacated the premises and terminated the lease effective November 1, 2025.

Since November 1, 2025, the Company operates on a fully remote model with co-working space rented on a month-to-month basis as required.

The components of lease expense are as follows:

Year ended December 31,

(in thousands) 2024 Year Ended 2023

(in thousands) 2025 2024

Operating lease expense $ 95 $ 126

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Variable lease expense primarily consists of utility and other common area maintenance ("CAM") charges .

For the year ended December 31, 2023 the variable lease expenses included a reversal of immaterial expense related to CAM charges.

Lease expense is included within general and administrative expenses on the consolidated statements of operations and comprehensive loss.

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Year ended December 31,

(in thousands) 2024 Year Ended 2023

(in thousands) 2025 2024

Operating leases $ 112 $ 126

Supplemental consolidated balance sheet information related to leases is as follows:

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

(in thousands) December 31, 2024

Operating lease right-of-use assets $ 93

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Weighted average discount rate 8.00 %

Maturities of lease liabilities as of December 31, 2024 are as follows:

(in thousands) Year ended December 31, 2024

Total lease payments 101

Less imputed interest ( 2 )

Total lease liability 99

Total current operating lease liabilities

NOTE 10 - EMPLOYEE SAVINGS PLAN

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As of December 31, 2025, there were no claims or actions pending against the Company that, in the opinion of management, are likely to have a material adverse effect on the Company.

NOTE 12 - MEZZANINE AND SHAREHOLDERS' EQUITY

NOTE 12 - SHAREHOLDERS' EQUITY

Preferred stock

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The voting powers (if any), preferences and relative, participating, optional or other special rights, and the qualifications, limitations and restrictions of any series of preferred stock will be set forth in a Certificate of Designation filed pursuant to the Delaware General Corporation Law, as determined by the Company's Board of Directors.

On November 11, 2022, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with Mutual Fund Series Trust, on behalf of AlphaCentric LifeSci Healthcare Fund (“AlphaCentric”), pursuant to which the Company issued on November 14, 2022, in a private placement transaction, an aggregate of 3,000 shares of Series A Convertible Preferred Stock, par value $ 0.0001 per share (the “Series A Preferred”), for an aggregate subscription amount equal to $ 300,000 .

This transaction resulted in $ 89,000 of issuance costs and net proceeds of $ 211,000 .

The Company determined that the Series A Preferred should be classified as Mezzanine Equity (temporary equity outside of permanent equity), because the Series A Preferred more closely aligned with debt as the intent was for redemption by either the holder or the Company due to the favorable redemption terms.

The Purchase Agreement required that the Company convene a meeting of stockholders for the purpose of presenting a proposal (the “Proposal”) authorizing the Company's board of directors to approve a reverse stock split of its outstanding common stock, with the recommendation of the board of directors that the Proposal be approved, and that the Company use reasonable best efforts to obtain approval of the Proposal.

The meeting was convened on January 12, 2023, and the Proposal was approved.

Additionally, the Purchase Agreement contained customary representations, warranties and agreements of the Company and AlphaCentric, and customary indemnification rights and obligations of the parties.

Pursuant to the Purchase Agreement, the Company filed a Certificate of Designation of Preferences, Rights and Limitations of Series A Co nvertible Preferred Stock (the “Certificate of Designation”) with the Secretary of State of Delaware on November 14, 2022 designating 3,000 shares out of the authorized but unissued shares of its preferred stock as Series A Preferred with a par value of $ 0.0001 per share and establishing the rights, preferences and limitations of the Series A Preferred.

The Certificate of Designation prov ided, among other things, that except as otherwise provided in the Certificate of Designation or as otherwise required by law, the Series A Preferred would have no voting rights (other than the right to vote as a class on certain matters as provided in the Certificate of Designation).

However, pursuant to the Certificate of Designation, each share of Series A Preferred entitled the holder thereof (i) to vote on the Proposal and any proposal to adjourn any meeting of stockholders called for the purpose of voting on the Proposal, and (ii) to 1,000,000 votes per share of Series A Preferred on the Proposal and any such adjournment proposal.

The Series A Preferred should, except as required by law, vote together with the common stock (and other issued and outstanding shares of preferred stock entitled to vote), as a single class;

provided, however, that such shares of Series A Preferred should, to the extent cast on the Proposal or any such adjournment proposal, be automatically and without further action of the holders thereof voted in the same proportion as the shares of common stock (excluding abstentions and any shares of common stock that are not voted) and any other issued and outstanding shares of preferred stock of the Company entitled to vote (other than the Series A Preferred or shares of such other preferred stock, if any, not voted) are voted on the Proposal.

In addition, the Series A Preferred were entitled to customary dividends and distributions when and if paid on shares of the common stock and were entitled to the voting rights discussed above.

The Series A Preferred had preference over the common stock with respect to distribution of assets or available proceeds, as applicable, in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company or any other deemed liquidation event.

The shares of Series A Preferred were convertible at the option of the holder, at a conversion price of $ 4.68 per share (as adjusted for the reverse stock split), into shares of the Company’s common stock, at any time and from time to time from and after 15 business days following the earlier of (i) the date of the approval of the Proposal or (ii) the date the Company otherwise satisfied the Nasdaq listing requirements.

The Company had the right to redeem the Series A Preferred at any time during the 15 business days following the approval of the Proposal (the "Company Redemption Period") at 120 % of the stated value.

Each holder of Series A Preferred had the right to require the Company to redeem all or a portion of the Series A Preferred held by such holder following the expiration of the Company Redemption Period at 130 % of the stated value.

In addition, the Company would automatically redeem all of the Series A Preferred within five business days following a delisting event as specified in the Certificate of Designation at 130 % of the stated value.

On January 17, 2023, the Company redeemed all outstanding shares of its Series A Preferred, for an aggregate of $ 360,000 paid to AlphaCentric.

The redemption payment represented 120 % of the stated value of the Series A Preferred Stock pursuant to the Certificate of Designation.

On January 17, 2023, the Company filed a Certificate of Elimination (the “Certificate”) with the Secretary of State of the State of Delaware with respect to the Series A Preferred Stock.

The Certificate (i) eliminated the previous designation of 3,000 shares of Series A Preferred Stock from the Company’s Amended and Restated Certificate of Incorporation, none of which were outstanding at the time of filing, and (ii) caused such shares of Series A Preferred Stock to resume their status as authorized but unissued and non-designated shares of preferred stock.

Pursuant to the Certificate of Incorporation, the Company is authorized to issue 150,000,000 shares of common stock, par value $ 0.0001 per share.

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The holders of common stock are also entitled to receive dividends whenever funds are legally available and when and if declared by the board of directors, subject to the prior rights of holders of all classes of preferred stock outstanding.

The Company has never declared any dividends on common stock.

On February 8, 2023, the Company's Board of Directors approved a 1-for-18 reverse stock split of the Company's outstanding shares of common stock.

The reverse stock split was effected on February 10, 2023.

At the effective time, every 18 issued and outstanding shares of the Company's common stock were converted into one share of common stock.

No fractional shares were issued in connection with the reverse stock split, and in lieu thereof, each holder of fractional shares was entitled to receive a cash payment (without interest or deduction) in an amount equal to such holder’s respective pro rata share of the total net proceeds from the Company’s transfer agent's sale of all fractional shares at the then-prevailing prices on the open market.

The number of authorized shares of the Company's common stock and the par value of each share of common stock remained unchanged.

Unless noted, all common stock and per share amounts contained in the consolidated financial statements have been retroactively adjusted to reflect the 1-for-18 reverse stock split.

As of December 31, 2024, t he Company had reserved shares of common stock for future issuance as follows:

The Company has not previously declared any dividends on common stock.

As of December 31, 2025, the Company had reserved shares of common stock for future issuance as follows:

(in numbers of shares)

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Outstanding restricted stock units (Note 13)

Shares available for grant under the Employee Stock Purchase Plan (Note 13)

Shares available for grant under the Employee Share Purchase Plan (Note 13) 62,419

Shares underlying other outstanding warrants 27,509

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Cantor Fitzgerald was entitled to compensation for its services equal to up to 3.0 % of the gross proceeds of any shares of common stock sold under the Cantor Sales Agreement.

During the year ended December 31, 2023, the Company issued and sold 34,589 shares of common stock at a weighted average per share price of $ 4.66 pursuant to the Cantor Sales Agreement for $ 0.2 million in net proceeds.

On February 27, 2024, the Company delivered notice to Cantor Fitzgerald to terminate the Cantor Sales Agreement.

In 2024 the Cantor Sales Agreement was terminated.

The Company cannot make any future sales of its common stock pursuant to the Cantor Sales Agreement.

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Cowen is entitled to compensation for its services equal to 3.0 % of the gross proceeds of any shares of common stock sold under the Cowen Sales Agreement.

The Company did not sell any shares of common stock under the Cowen Sales Agreement during the year ended December 31, 2024.

Private Placement

On October 27, 2023, the Company entered into the Securities Purchase Agreement, pursu ant to which the Company agreed to sell and issue to the Purchasers in the Private Placement (i) 10,652,543 shares of the Company’s common stock and (ii) with respect to certain Purchasers, Pre-Funded Warrants to purchase 28,614,437 shares of common stock in lieu of shares.

The Stock Purchase Price was $ 2.245 per share and the purchase price for the Pre-Funded Warrants was the Stock Purchase Price minus $ 0.0001 per Pre-Funded Warrant.

On November 1, 2023, the Company received gross proceeds of $ 88.2 million from the Private Placement.

This transaction resulted in $ 5.5 million of issuance costs and net proceeds of $ 82.7 million.

The Company did not sell any shares of common stock under the Cowen Sales Agreement during the years ended December 31, 2025 and 2024.

Pre-Funded Warrants

In October 2023, the Company entered into a Security Purchase Agreement, pursuant to which the Company agreed to sell and issue to the Purchasers in a private placement shares of the Company’s common stock and Pre-Funded Warrants (the "Private Placement").

The Pre-Funded Warr ants issued in the Private Placement will not expire until exercised in full.

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The Company maintains the 2023 Equity Incentive Plan (the "2023 Plan") and previously maintained the 2019 Equity Incentive Plan (the “2019 Plan”) and 2018 Omnibus Incentive Plan (the "2018 Plan").

Following stockholder approval during the year ended December 31, 2023, any shares then available for future grant under the 2019 Plan and 2018 Plan were allocated to the 2023 Plan and no further grants could be made under the 2018 Plan and the 2019 Plan.

Following stockholder approval in December 2023, any shares then available for future grant under the 2019 Plan and 2018 Plan were allocated to the 2023 Plan and no further grants could be made under the 2018 Plan and the 2019 Plan.

In December 2024, stockholders approved a proposal to amend the 2023 Plan to further increase shares available for grant under the 2023 Plan by 1,520,000 shares.

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In November 2024, the Board reduced the number of shares available to be issued under the Inducement Plan to one share.

As of December 31, 2024 , there was one share available for future Inducement Grants.

During 2025, 111,250 shares were returned to the Inducement Plan as a result of forfeited equity awards.

As of December 31, 2025 , there were 111,251 shares available for future Inducement Grants, which includes shares underlying Inducement Grants that were forfeited.

2019 Employee Share Purchase Plan

The Company has adopted an Employee Share Purchase Plan ("ESPP") pursuant to which qualified employees (as defined in the ESPP) may elect to purchase designated shares of the Company’s common stock at a price equal to 85 % of the lesser of the

fair market value of the common stock at the beginning or end of each semi-annual share purchase period (“Purchase Period”).

The Company has adopted the ESPP pursuant to which qualified employees (as defined in the ESPP) may elect to purchase designated shares of the Company’s common stock at a price equal to 85 % of the lesser of the fair market value of the common stock at the beginning or end of each semi-annual share purchase period (“Purchase Period”).

Employees are permitted to purchase the number of shares purchasable with up to 15 % of the earnings paid (as such term is defined in the ESPP) to each of the participating employees during the Purchase Period, subject to certain limitations under Section 423 of the U.S.

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1 year - 4 years

RSUs 435,000 — 4 years —

Year ended December 31, 2024

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RSUs 435,000 — 4 years —

During the years ended December 31, 2024 and 2023, the fair value of options and RSUs granted to employees and directors was $ 2.6 million and $ 2.4 million, respectively.

During the year ended December 31, 2025 and December 31, 2024 , the fair value of options and RSUs granted to employees and directors was $ 3.6 million and $ 2.6 million, respectively.

The fair value of RSUs granted is based on the share price on grant date.

One share of common stock will be issued upon settlement of each RSU that vests.

One s hare of common stock will be issued upon settlement of each RSU that vests.

The fair value of each option granted is estimated using the Black-Scholes option pricing method.

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$ 0.38 - $ 2.77

$ 1.96 - $ 2.40

Dividend yield — % — %

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Risk-free interest rate 4.19 % - 4.58 %

3.95 % - 4.32 %

Expected term 6 years 6 years

Modification of share-based compensation

On November 10, 2019, Menlo Therapeutics Inc.

("Menlo") entered into a merger agreement (the "Merger Agreement") with Foamix Pharmaceuticals Ltd.

("Foamix") and Giants Merger Subsidiary Ltd., a wholly-owned subsidiary of Menlo ("Merger Sub").

On March 9, 2020, Merger Sub merged with and into Foamix, with Foamix surviving as a wholly-owned subsidiary of Menlo (the "Merger").

The combined company changed its name to VYNE in September 2020.

Pursuant to the Merger, all outstanding options and RSUs granted by Foamix were exchanged for stock options and RSUs of Menlo’s common stock according to the exchange ratio set forth in the Merger Agreement.

In addition, for each option and RSU the holder received a contingent stock right ("CSR").

This transaction was considered to be a modification under ASC 718, Compensation - Stock Compensation.

The modification did not affect the remaining requisite service period.

As a result of the modification, for outstanding options and RSUs granted to Foamix employees and consultants, the Company recorded immaterial incremental compensation expense.

On April 6, 2020, pursuant to the terms of the agreement governing the CSRs, each CSR was converted into 1.2082 shares of Menlo common stock, resulting in an effective exchange ratio in the Merger of 1.8006 shares of Menlo common stock for each Foamix ordinary share.

As a result of the modification, for outstanding options and RSUs granted to Foamix employees and consultants, the Company recorded incremental compensation expense of $ 7 thousand and $ 46 thousand for the years ended December 31, 2024 and 2023, respectively.

Summary of outstanding and exercisable options and RSUs

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Outstanding at December 31, 2024

1,584,304 $ 19.65

Granted 1,662,500 2.61

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The weighted average remaining contractual term of outstanding and exercisable options as of December 31, 2025 was 8.40 years and 7.27 years, respectively.

Total unrecognized share-based compensation for options at December 31, 2024 was $ 1.9 million, which is expected to be recognized over a weighted average period of 2.76 years.

The intrinsic value of outstanding and exercisable options was $ 1.3 million and $ 134 thousand, respectively, as of December 31, 2024.

Total unrecognized share-based compensation for options as of December 31, 2025 was $ 3.6 million, which is expected to be recognized over a weighted average period of 2.83 years.

The intrinsic value of outstanding options was $ 16.0 thousand as of December 31, 2025.

There was no intrinsic value of exercisable options as of December 31, 2025.

The following table summarizes RSU activity for the year ended December 31, 2025:

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Outstanding at December 31, 2024 750,715 $ 2.77

Awarded 435,000 2.33

Vested ( 299,609 ) 3.10

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NOTE 14 - INCOME TAX

The loss before income taxes and the related tax (benefit) expense is as follows:

The loss before income taxes and the related tax expense is as follows:

Year ended December 31,

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Federal $ — $ —

Foreign — 121

Total current taxes $ 4 $ 4

Deferred taxes:

Federal $ — $ —

Total deferred taxes

The following is a reconciliation of the difference between the effective income tax rate and the federal statutory tax rate:

Year ended December 31,

Federal income tax provision at statutory rate $ ( 5,560 ) 21.00 %

State income tax provision, net of federal benefit (1) 3 ( 0.01 ) %

Permanent differences 407 ( 1.54 ) %

Change in valuation allowances ( 4,305 ) 17.42 %

Change in unrecognized tax benefits ( 120 ) 0.45 %

R&D tax credit ( 1,874 ) 7.08 %

Federal NOL carryforward deferred tax asset write-off 8,441 ( 31.88 ) %

R&D tax credit carryforward deferred tax write-off 2,106 ( 7.96 ) %

Share-based compensation deferred tax asset write-off 906 ( 4.58 ) %

Effective income tax rate $ 4 ( 0.02 ) %

(1) The state that contributed to the majority (greater than 50%) of the tax effect in this category was New Jersey.

A reconciliation of income taxes at the U.S.

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Effective income tax rate ( 0.01 ) %

Cash income taxes paid, net of refunds, totaled $ 4 thousand for the year ended December 31, 2025, all of which were paid in New Jersey.

The income tax expense for the years ended December 31, 2025 and 2024 differed from the amounts computed by applying the U.S.

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This clarifies the accounting for uncertainty in income taxes recognized in financial statements and required impact of a tax position to be recognized in the financial statements if that position is more likely than not of being sustained by the taxing authority.

Included in other liabilities on the consolidated balance sheets are the total amount of unrecognized tax benefits of approximately $ 2.6 million and $ 2.5 million as of December 31, 2024 and 2023, respectively, net of the federal benefit, which is offset by a valuation allowance.

The total amount of unrecognized tax benefits of approximately $ 2.4 million and $ 2.6 million as of December 31, 2025 and 2024, respectively, net of the federal benefit, which is offset by a full valuation allowance.

The Company’s policy is to recognize interest and penalties related to tax matters within the income tax provision.

Tax years beginning in 2020 are generally subject to examination by taxing authorities, although net

operating losses from all years are subject to examinations and adjustments for at least three years following the year in which the attributes are used.

Tax years beginn ing in 2021 are g enerally subject to examination by taxing authorities, although net operating losses from all years are subject to examinations and adjustments for at least three years following the year in which the attributes are used.

The significant components of the Company's deferred tax assets and liabilities are as follows:

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At December 31, 2025 and 2024, the Company recorded a valuation allowance against its net deferred tax assets of $ 98.7 million and $ 100.7 million, respectively.

The change in the valuation allowance during the years ended December 31, 2024 and 2023 was an increase of $ 10.9 million and $ 2.9 million, resp ectively.

A valuation allowance has been recorded since, in the judgment of management, these assets are not more likely than not to be realized.

The change in the valuation allowance during the years ended December 31, 2025 and 2024 was a decrease of $ 2.0 million and $ 10.9 million, respectively.

A valuation allowance has been recorded since, in the judgment of management, the se assets are not more likely than not to be realized.

The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during periods in which those temporary differences and carryforwards beco me deductible or are utilized.

As of December 31, 2024, the Company had federal and state net operating loss carryforwards of $ 343.4 million and $ 53.6 million, respectively, of which $ 44.3 million will begin to expire in 2031 for federal and $ 53.6 million will begin to expire in 2040 for state purposes.

As of December 31, 2025, the Company had federal and state net operating loss carryforwards of $ 332.1 million and $ 94.2 million, respectively, of which $ 4.1 million will begin to expire in 2037 f or federal and $ 94.2 million will begin to expire in 2040 fo r state purposes.

As of December 31, 2025, the Company had federal research and development tax credit carryforwards of $ 7.1 million, which will begin to expire in 2031.

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tax reform legislation, federal net operating losses generated beginning in 2018 and subsequent years carryforward indefinitely, however, the Company has federal net operating losses that pre-date U.S.

tax reform legislation which begin to expire in 2031 and federal credit carryforwards that begin to expire in 2031.

State net operating loss carryforwards begin to expire in 2031, and the state credit carryforwards began to expire in 2031.

tax reform legislation which begin to expi re in 2037 and federal credit carryforwards that begin to expire in 2031.

State n et operating loss carryforwards begin to e xpire in 2040.

Sections 382 and 383 of the Internal Revenue Code of 1986 subject the future utilization of net operating losses and certain other tax attributes, such as research and development tax credits, to an annual limitation in the event of certain ownership changes, as defined.

The Company has not completed a 382 study through December 31, 2024 , however, it may have experienced ownership changes in the past, including in connection with the Merger.

In addition, the Private Placement likely resulted in an ownership change for purposes of Section 382 and therefore t he Company may be materially limited in the amount of NOL and R&D tax credit available for utilization in the future.

The Company has not completed a 382 study through December 31, 2025;

however, we have completed a 382 study through March 31, 2025, and we determined that we 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.

As a result of the ownership changes, $ 40.2 million of federal NOLs and $ 2.1 million of research and development tax credits are expected to expire unutilized and have been written off.

The Company generated research and development tax credits but has not conducted a study to document the qualified activities.

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Balance at January 1, 2024

Additions for prior year positions 19

Reductions for prior year positions ( 3 )

Additions for current year positions 111

Reductions related to expiration of statute of limitations ( 520 )

Balance at December 31, 2024 $ 2,566

Reductions for prior year positions

Additions for prior year positions

Additions for current year positions 163

Reductions related to write off of R&D Tax Credit from Deferred Tax Asset

Balance at December 31, 2025 $ 2,446

NOTE 15 - SEGMENT INFORMATION

The Company operates in one operating segment, and therefore one reportable segment, focused on the development of differentiated therapies to treat chronic inflammatory and immune-mediated conditions of high unmet need.

The Company operates in one operating segment, and therefore one reportable segment, focused on the development of differentiated therapies to treat inflammatory and immune-mediated conditions of high unmet need.

This determination, that the Company operates as a single operating segment, is consistent with the financial information regularly reviewed by the Chief Operating Decision Maker (“CODM”) for purposes of evaluating performance, allocating resources, and planning and forecasting for future periods.

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Loss from continuing operations ( 26,736 ) ( 39,807 )

Loss from discontinued operations, net of income taxes ( 27 ) ( 580 )

Income (loss) from discontinued operations, net of income taxes 253 ( 27 )

Net loss $ ( 26,483 ) $ ( 39,834 )

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data