RLYB 10-K & 10-Q changes, risk factors and insider trading

Risks Related to the Merger

Failure to complete, or delays in completing, the proposed Merger with Candid could materially and adversely affect our results of operations, business, financial results and/or stock price.

Any failure to satisfy a required condition to closing may prevent, delay or otherwise materially and adversely affect the completion of the Merger, which could materially and adversely affect our results of operations, business, financial results and/or stock price. We 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 the proposed Merger will be successfully consummated or that we will be able to successfully consummate the proposed Merger as currently contemplated under the Merger Agreement or at all.

Even if certain of the proposals in the Merger Agreement are approved by our stockholders, specified conditions must be satisfied or, to the extent permitted by applicable law, waived to complete the Merger. We cannot assure you that all of the conditions will be satisfied or waived.

Risks related to the failure to consummate, or delay in consummating, the proposed Merger with Candid include, but are not limited to, the following:

•we would not realize any or all of the potential benefits of the Merger, which could have a negative effect on our results of operations, business or stock price;

•under some circumstances, we may be required to pay a termination fee to Candid of $1.425 million, with expense reimbursement of up to $500,000 credited against the payment of any such termination fee;

•we would remain liable for significant transaction costs, including legal, accounting, financial advisory and other costs relating to the Merger regardless of whether the Merger is consummated;

•the trading price of our common stock may decline to the extent that the current market price for our common stock reflects a market assumption that the Merger will be completed;

•the attention of our management and employees may have been diverted to the Merger rather than to our historical operations and the pursuit of other opportunities that could have been beneficial to us;

•we could be subject to litigation related to any failure to complete the Merger;

•we could potentially lose key personnel during the pendency of the Merger; and

•under the Merger Agreement, we are subject to certain customary restrictions on the conduct of our business prior to completing the Merger, which restrictions could adversely affect our ability to conduct our business as we otherwise would have done if we were not subject to these restrictions.

The occurrence of any of these events individually or in combination could materially and adversely affect our results of operations, business, and our common stock price, and we may lose some or all the intended benefits of the Merger.

We are substantially dependent on our remaining employees to facilitate the consummation of the Merger.

Our ability to consummate a strategic transaction depends upon our ability to retain our remaining employees required to consummate such a transaction, the loss of whose services may adversely impact the ability to consummate such transaction. As of December 31, 2025, we had only 14 full-time employees. Our ability to successfully complete the Merger depends in large part on our ability to retain key personnel that are necessary to maintain our operations between now and the Effective Time. Despite our efforts to retain these employees, one or more may terminate their employment with us on short notice. Our cash conservation activities may yield other unintended consequences, such as reduced employee morale, which may cause remaining employees to seek alternative employment. The loss of the services of certain employees could potentially harm our ability to consummate the Merger, to run our day-to-day business operations, as well as to fulfill our reporting obligations as a public company.

The Exchange Ratio will not be adjusted based on the market price of our common stock, so the consideration at the closing of the Merger may have a greater or lesser value than at the time the Merger Agreement was signed.

The Exchange Ratio will not change based on changes in the trading price of our common stock. Therefore, if before the completion of the Merger, the market price of our common stock increases from the market price on the date of the Merger Agreement, Candid stockholders could then receive merger consideration with substantially higher value for their shares of Candid common stock than the parties had negotiated when they established the Exchange Ratio. The Merger Agreement does not include a price-based termination right. Immediately after the Merger, our securityholders as of immediately prior to the Merger are expected to own approximately 3.65% of the outstanding shares of the combined company and former Candid securityholders, including purchasers in the Concurrent Financing, are expected to own approximately 96.35% of the outstanding shares of the combined company, subject to certain assumptions, including, but not limited to, (a) a valuation of us equal to $47.5 million, based on certain assumptions, including our net cash as of the closing date of the Merger being equal to $37.5 million, (b) a valuation for Candid equal to $750.0 million and (c) Candid issuing approximately $505.5 million of Candid Common Stock in the Concurrent Financing described in the related proxy statement/prospectus.

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

In general, either we or Candid can refuse to complete the Merger if there is a Rallybio Material Adverse Effect (as defined in the Merger Agreement) or a Company Material Adverse Effect (as defined in the Merger Agreement), as applicable, between March 1, 2026, the date of the Merger Agreement, and the closing of the Merger. However, certain types of changes do not permit either party to refuse to complete the Merger, even if such change could be said to have a material adverse effect on us or Candid, including:

•general business, political or economic conditions generally affecting the industry in which we or Candid operate, including with respect to the imposition of, or adjustments to, tariffs or other trade restrictions;

•acts of war, the outbreak or escalation of armed hostilities, acts of terrorism, earthquakes, wildfires, hurricanes or other natural disasters, health emergencies, including pandemics and related or associated epidemics, disease outbreaks or quarantine restrictions;

•changes in financial, banking or securities markets;

•any change in the stock price or trading volume of our common stock (it being understood, however, that any effect causing or contributing to any change in stock price or trading volume of our common stock may be taken into account in determining whether a material adverse effect with respect to us has occurred, unless such effects are otherwise excepted from the definition of Rallybio Material Adverse Effect);

•any failure by us to meet internal or analysts’ expectations or projections or the results of our operations (it being understood, however, that any effect causing or contributing to the failure of us to meet internal or analysts’ expectations or projections or the results of our operations may be taken into account in determining whether a material adverse effect with respect to us has occurred, unless such effects are otherwise excepted from the definition of Rallybio Material Adverse Effect);

•any change in, or any compliance with or action taken for the purpose of complying with, any applicable law or GAAP (or interpretations of any applicable law or GAAP);

•the announcement of the Merger Agreement or the pendency of the Contemplated Transactions; or

•the taking of any action required to be taken by the Merger Agreement.

If a material adverse change occurs with respect to either party or both parties and we and Candid still complete the Merger, the stock price of the combined company following the closing of the Merger may suffer and may reduce the value of the Merger to our stockholders.

Some of our executive officers and directors have interests in the Merger that are different from our stockholders and that may influence them to support or approve the Merger without regard to the interests of our stockholders.

Certain of our executive officers and directors are parties to arrangements that provide them with interests in the Merger that are different from our stockholders, including severance benefits, the acceleration of equity award vesting and continued indemnification.

In addition, Robert Hopfner, a current member of our board, is affiliated with an investment fund participating in the Concurrent Financing.

Our board of directors was aware of and considered these interests, among other matters, in reaching its determination (i) that the terms of the Merger Agreement and the Merger and the other Contemplated Transactions are fair to, advisable and in the best interest of us and our stockholders and (ii) to approve and declare advisable the Merger Agreement and the Contemplated Transactions, including the Merger and the issuance of shares of our common stock to the stockholders of Candid pursuant to the Merger Agreement. These interests, among other factors, may have influenced the directors and executive officers to support or approve the Merger.

Our stockholders may not realize a benefit from the Merger commensurate with the ownership dilution they will experience in connection with the Merger.

If the combined company is unable to realize the full strategic and financial benefits currently anticipated from the Merger, our 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.

Our equityholders will 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, our current stockholders will own a smaller percentage of the combined company than their ownership of their respective companies prior to the Merger. Immediately after the Merger, our securityholders as of immediately prior to the Merger are expected to own approximately 3.65% of the outstanding shares of the combined company and former Candid securityholders, including purchasers in the Concurrent Financing, are expected to own approximately 96.35% of the outstanding shares of the combined company, subject to certain assumptions, including, but not limited to, (a) our valuation equal to $47.5 million, based on certain assumptions, including our net cash as of the closing date of the Merger being equal to $37.5 million, (b) a valuation for Candid equal to $750.0 million and (c) Candid issuing approximately $505.5 million of Candid Common Stock in the Concurrent Financing.

Lawsuits may be filed against us and the members of our board of directors arising out of the proposed Merger, which may delay or prevent the proposed Merger.

Putative stockholder complaints, including stockholder class action complaints, and other complaints may be filed against us, our board of directors, Candid, the Candid Board of directors and others in connection with the transactions contemplated by the Merger Agreement. The outcome of litigation is uncertain, and we may not be successful in defending against any such future claims. Lawsuits that may be filed against us, our board of directors, Candid, or the Candid board of directors could delay or prevent the Merger, divert the attention of our management and employees from our day-to-day business and otherwise adversely affect our financial condition.

During the pendency of the Merger Agreement, we may not be able to enter into a business combination with another party at a favorable price because of restrictions in the Merger Agreement, which could adversely affect their respective businesses.

Covenants in the Merger Agreement impede our ability to make acquisitions or complete other mergers, sales of assets or other business combinations pending completion of the Merger. As a result, if the Merger is not completed, the parties may be at a disadvantage to their competitors during that period. In addition, while the Merger Agreement is in effect, each party is generally prohibited from soliciting, initiating, knowingly encouraging or entering into specified extraordinary transactions, such as a merger, sale of assets or other business combination, with any third party, subject to specified exceptions, even if any such transaction could be favorable to such party’s stockholders or stockholders, as applicable.

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

The terms of the Merger Agreement prohibit each of us and Candid from soliciting competing proposals or cooperating with persons making unsolicited takeover proposals, except in certain limited circumstances. With respect to us, the board of directors may respond to an unsolicited competing proposal if it determines in good faith, after consultation with its outside financial advisor and outside legal counsel, that the unsolicited competing proposal constitutes, or is reasonably likely to result in, a superior competing proposal and, after consultation with its outside legal counsel, that failure to take such action would be inconsistent with the fiduciary duties of our board of directors. With respect to Candid, following receipt of a bona fide acquisition proposal by any person that the Candid Board has determined is reasonably likely to result in a superior competing proposal, Candid may solicit acquisition proposals and furnish information to, and enter into discussions with, any person (including persons not making such proposal) if the Candid Board concludes in good faith, after consultation with its outside legal counsel and financial advisor, that failure to take such action would be inconsistent with the fiduciary duties of the Candid Board.

In certain circumstances, and subject to compliance with the Merger Agreement, our board of directors or the Candid Board may change its recommendation to its respective stockholders if it determines such recommendation change is required to avoid a breach of its fiduciary duties. Additionally, subject to compliance with the procedures set forth in the Merger Agreement, including paying the applicable termination fee, Candid may terminate the Merger Agreement in order to enter into an agreement with respect to a Superior Offer (as defined in the Merger Agreement).

Upon termination of the Merger Agreement in certain circumstances, a termination fee of $1.425 million may be payable by us to Candid if (i)(a) the Merger Agreement is terminated because the Merger has not been consummated by the End Date or we (1) fail to obtain the requisite stockholder approval of the Rallybio Stockholder Matters or (2) breach the Merger Agreement, (b) an alternative acquisition proposal was announced or disclosed prior to such termination, and (c) within 12 months of the termination of the Merger Agreement, we enter into a definitive agreement with respect to an alternative transaction, (ii) we fail to include our board recommendation in the related proxy statement/prospectus, or (iii) our board of directors changes or withdraws its recommendation in favor of the Merger or approves an alternative transaction, or willfully and intentionally breaches its non-solicitation or certain other obligations under the Merger Agreement.

Both we and Candid have also each agreed to reimburse the other party for up to $500,000 for third-party expenses, as applicable, if the Merger Agreement is terminated in certain circumstances.

These termination fees and expense reimbursement provisions may discourage third parties from submitting competing proposals to us or Candid or their respective stockholders and may cause our board of directors or the Candid board, as the case may be, to be less inclined to recommend a competing proposal.

If the Merger does not qualify as a reorganization under the Code, U.S. holders of our Common Stock may be taxed on the full amount of the consideration received in the Merger.

Each of we and Candid intend that the Merger qualifies as a “reorganization” within the meaning of Section 368(a) of the Code. Assuming the Merger so qualifies, no gain will be recognized by U.S. holders of Candid shares will not recognize gain or loss for U.S. federal income tax purposes upon the receipt of shares of our common stock in exchange for Candid shares in the Merger. It is not, however, a condition to the parties’ obligation to complete the transactions that the Merger so qualifies. None of the parties to the Merger Agreement have sought or intend to seek any ruling from the Internal Revenue Service (“IRS”) regarding the qualification of the Merger as a reorganization within the meaning of Section 368(a) of the Code. If the Merger does not qualify for the U.S. federal income tax treatment described herein, U.S. holders of Candid shares may be taxed on any gain realized up to the full fair market value of any our Common Stock received in the Merger.

We or Candid may waive one or more of the conditions to the Merger without recirculation of the related proxy statement/prospectus or resoliciting stockholder approval.

Conditions to our or Candid’s obligations to complete the Merger may be waived, in whole or in part, to the extent permitted by law, in certain circumstances unilaterally or by agreement of us and Candid. In the event of a waiver of a condition, our board of directors will evaluate the materiality of any such waiver to determine whether amendment of the related proxy statement/prospectus and re-solicitation of stockholder approval is necessary.

In the event that our board of directors, in its own reasonable discretion, determines any such waiver is not significant enough to require recirculation of the related proxy statement/prospectus and re-solicitation of its stockholders, it will have the discretion to complete the Merger without seeking further stockholder approval, which decision may have a material adverse effect on our stockholders. For example, if we and Candid agree to waive the requirement that the shares of our 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, and their respective boards of directors elect to proceed with the closing of the Merger, Nasdaq may notify the combined company of its determination to delist the combined company’s securities based upon the failure to satisfy the initial inclusion criteria in the Nasdaq application. The combined company may appeal the determination to a hearings panel but such appeal will not stay the suspension and delisting action and Nasdaq may notify the combined company that its common stock will be immediately suspended from trading and delisted.

In addition, in order to meet the initial listing requirements of Nasdaq or as otherwise determined in the discretion of the combined company board pursuant to the terms of the Lock-Up Agreements, our board of directors or combined company board may release stockholders from their Lock-Up Agreements and waive the requirement that such Lock-Up Agreements be in full force and effect immediately following the Effective Time. Such release would increase the number of shares that may be sold in the public market immediately after the Merger and any such sales could cause the combined company’s stock price to decline.

Our winddown of our historical operations, the sale of assets, the suspension of development activities and the proposed Merger, resulting in the conversion of Candid into a public company, will make us subject to the SEC requirements applicable to reporting shell company business combinations. As a result, the combined company will be subject to more stringent reporting requirements, offering limitations and resale restrictions.

According to SEC guidance, the requirements applicable to reporting shell company business combinations apply to any company that sells or otherwise disposes of its historical assets or operations in connection with or as part of a plan to combine with a non-shell private company in order to convert the private company into a public one. As such, our plan to merge with Candid, resulting in the conversion of Candid into a public company, will be subject to the SEC requirements applicable to reporting shell company business combinations, which are as follows:

•the combined company will need to file a Current Report on Form 8-K to report the Form 10 type information (“Super 8-K”) after closing of the Merger reflecting its status as an entity that is not a shell company;

•the combined company will not be eligible to use a Form S-3 until 12 full calendar months after closing of the Merger;

•the combined company will need to wait at least 60 calendar days after the filing of the Super 8-K to file a Form S-8 for any equity plans or awards, such as the 2026 Plan and the 2026 ESPP;

•the combined company will be an “ineligible issuer” for three years following the closing of the Merger, which will prevent the combined company from (i) incorporating by reference in its Form S-1 filings, (ii) using a free writing prospectus or (iii) taking advantage of the well-known seasoned issuer (“WKSI”) status, even if otherwise eligible based on its public float;

•investors who (i) were affiliates of Candid at the time the Merger was submitted for the vote or consent of Candid’s stockholders, (ii) receive securities of the combined company in the Merger and (iii) publicly offer or sell such securities will be deemed to be engaged in a distribution of such securities, and therefore would be underwriters with respect to resales of those securities; and

Recent Developments

On March 1, 2026, we entered into the Merger Agreement with Candid, a clinical-stage biotechnology company advancing a leading portfolio of TCE therapeutics for autoimmune diseases, and Merger Sub, a wholly owned subsidiary of Rallybio. Upon the terms and subject to the satisfaction of the conditions described in the Merger Agreement, Merger Sub will be merged with and into Candid, with Candid surviving as a wholly owned subsidiary of Rallybio. The Merger is intended to qualify as a tax-free reorganization for U.S. federal income tax purposes.

Concurrently with the execution and delivery of the Merger Agreement, certain investors entered into subscription agreements with Candid, pursuant to which such investors have agreed to purchase, immediately prior to the Merger, shares of Candid common stock representing an aggregate commitment of approximately $505.5 million in the Concurrent Financing. The shares of Candid common stock that are issued in the Concurrent Financing will be or will have the right to be, respectively, converted into shares of Rallybio Common Stock in the Merger.

Subject to the terms and conditions of the Merger Agreement, at the Effective Time, (a) each then-outstanding share of common stock or preferred stock of Candid (each such share, a “Candid Share”) (excluding any share described in clauses (b) or (c) below and Candid Shares held by stockholders who have exercised and perfected appraisal rights for such shares) will be converted into the right to receive a number of shares of Rallybio Common Stock, calculated in accordance with the Exchange Ratio, (b) each Candid Share issued in the Concurrent Financing will be converted into the right to receive a number of shares of Rallybio Common Stock calculated in accordance with the Merger Agreement, (c) any Candid Shares held as treasury shares or held or owned by Rallybio, Merger Sub or any subsidiary of Rallybio or Candid immediately prior to the Effective Time will be canceled and shall cease to exist, and no consideration shall be delivered in exchange therefor. Each then-outstanding option to purchase Candid Shares will be converted into an option to purchase Rallybio Common Stock, subject to adjustment as set forth in the Merger Agreement.

Under the Exchange Ratio and Concurrent Financing Exchange Ratio formulas in the Merger Agreement, immediately after the Closing, on a pro forma basis and based upon the number of shares of Rallybio Common Stock expected to be issued in connection with the Merger, pre-Merger equityholders of Candid (other than investors in the Concurrent Financing) are expected to own approximately 57.55% of the combined company, pre-Merger equityholders of Rallybio are expected to own approximately 3.65% of the combined company and the Investors in the Concurrent Financing are expected to own approximately 38.80% of the combined company (assuming proceeds from the Concurrent Financing of $505.5 million), in each case, calculated on a fully diluted basis, using the treasury stock method, and subject to certain assumptions, including (i) a valuation for Rallybio of $47.5 million (assuming Rallybio Net Cash of $37.5 million as of the Closing), (ii) a fixed valuation for Candid of $750.0 million, and (iii) the relative capitalization of Rallybio and Candid. The percentage of the combined company that each party’s equity holders will own following the Closing is subject to certain adjustments as described in the Merger Agreement, including the amount of the final Rallybio Net Cash at Closing.

Immediately prior to the Effective Time, Rallybio and a rights agent are expected to enter into a CVR Agreement, pursuant to which holders of record of certain Rallybio securities as of the close of business on the last business day prior to the day on which the Effective Time occurs will receive one CVR for each outstanding share of Rallybio Common Stock, prefunded warrant, Rallybio restricted stock unit or In the Money Parent Option (as defined in the CVR Agreement) held as of such date. Pursuant to the CVR Agreement, each CVR holder will be entitled to receive their pro rata share of (i) all of the net proceeds (including cash the value of stock to the extent listed on a national exchange, at the time of disposition), if any, received by Rallybio as a result of payments made to Rallybio of any upfront, milestone, royalty and other payments received under any disposition agreement related to Rallybio’s Legacy Assets, and (ii) all of the cash proceeds, if any, received from Recursion under the Membership Interest Purchase Agreement, dated July 8, 2025, by and among Recursion, Exscientia Ventures I, Inc., Rallybio Corporation and Rallybio IPB, LLC. For a period of one year after the Closing Date, Rallybio will use commercially reasonable efforts to effect the disposition of the Legacy Assets. Such net proceeds will be subject to certain permitted deductions, including for applicable tax payments, certain expenses incurred or other liabilities borne by Rallybio or its affiliates in respect of the Legacy Assets, and losses incurred by Rallybio or its affiliates due to a third-party proceeding in connection with such disposition.

We completed a confirmatory PK and PD study of RLYB116 in healthy volunteers in 2025 and reported data in the first quarter of 2026.

In July 2025, we entered into a Membership Interest Purchase Agreement (the “ENPP1 Purchase Agreement”) with Recursion Exscientia Ventures I, Inc., an indirect wholly-owned subsidiary of Recursion (“Buyer”) and Rallybio IPB, LLC, a wholly-owned subsidiary of Rallybio Corporation to sell our interest in REV102, an ENPP1 inhibitor in preclinical development for the treatment of patients with HPP, to Buyer (a subsidiary of our joint venture partner Recursion) (the "JV Sale"). In connection with the JV Sale, we received a total of $20.0 million in the third quarter of 2025 including $7.5 million from an upfront payment and $12.5 million from a milestone payment related to the initiation of additional preclinical studies. We are eligible to receive a $5.0 million milestone payment in connection with the initiation of dosing in a Phase 1 clinical study, as defined in the ENPP1 Purchase Agreement and low single-digit royalties on all future net sales by Recursion of products comprising or incorporating certain compounds developed by REV-I. We may also be eligible to receive certain payments in the event of Recursion’s sale of the REV102 program.

In April 2025, we announced the discontinuation of our RLYB212 program for the prevention of FNAIT based on PK data from the Phase 2 clinical trial that demonstrated an inability of the RLYB212 dose regimen to achieve predicted target concentrations, as well as the minimum target concentration required for efficacy.

RLYB116 is an innovative, once-weekly, small volume, subcutaneously injected inhibitor of C5 in development for the treatment of patients with complement-related diseases. We have completed two Phase 1 clinical trials in healthy participants that included the study of RLYB116 as both a SAD and a MAD. After the first Phase 1 clinical trial, we completed manufacturing process enhancements that were designed to improve the tolerability of RLYB116. In 2025, we completed the confirmatory Phase 1 clinical trial evaluating the PK/PD properties of RLYB116. The confirmatory trial achieved its two key objectives including: a significant improvement in the tolerability of RLYB116 and demonstration of complete and sustained inhibition of terminal complement. These results support the study of RLYB116 as a potential best-in-class therapeutic for multiple complement mediated diseases.

In July 2025, we announced that we had entered into the ENPP1 Purchase Agreement to sell our interest in REV102, an ENPP1 inhibitor in preclinical development for the treatment of patients with HPP, to Buyer (a subsidiary of our joint venture partner Recursion). In connection with the JV Sale, we received a total of $20.0 million in the third quarter of 2025 including $7.5 million from an upfront payment and $12.5 million from a milestone payment related to the initiation of additional preclinical studies. We are eligible to receive a $5.0 million milestone cash payment in connection with the initiation of dosing in a Phase 1 clinical study, as defined in the ENPP1 Purchase Agreement and low single-digit royalties on all future net sales by Recursion of products comprising or incorporating certain compounds developed by REV-I. We may also be eligible to receive certain payments in the event of Recursion’s sale of the REV102 program.

We determined there were performance obligations as follows:

The successful development of any product candidate is highly uncertain. If we are unable to complete the proposed transaction with Candid and continue to progress our product candidates, we will need to raise substantial additional capital in the future to fund the future development of our current programs. We intend to focus our near term research and development efforts on completing the ongoing activities and preparing our programs for a potential transaction or sale.

Risks Related to the Merger

Failure to complete, or delays in completing, the proposed Merger with Avenzo could materially and adversely affect our results of operations, business, financial results and/or stock price.

Any failure to satisfy a required condition to closing may prevent, delay or otherwise materially and adversely affect the completion of the Merger, which could materially and adversely affect our results of operations, business, financial results and/or stock price. We 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 the proposed Merger will be successfully consummated or that we will be able to successfully consummate the proposed Merger as currently contemplated under the Merger Agreement or at all.

Even if certain of the proposals in the Merger Agreement are approved by our stockholders, specified conditions must be satisfied or, to the extent permitted by applicable law, waived to complete the Merger. We cannot assure you that all of the conditions will be satisfied or waived.

Risks related to the failure to consummate, or delay in consummating, the proposed Merger with Avenzo include, but are not limited to, the following:

▪we would not realize any or all of the potential benefits of the Merger, which could have a negative effect on our results of operations, business or stock price;

▪under some circumstances, we may be required to pay a termination fee to Avenzo, with expense reimbursement credited against the payment of any such termination fee;

▪we would remain liable for significant transaction costs, including legal, accounting, financial advisory and other costs relating to the Merger regardless of whether the Merger is consummated;

▪the trading price of our common stock may decline to the extent that the current market price for our common stock reflects a market assumption that the Merger will be completed;

▪the attention of our management and employees may have been diverted to the Merger rather than to our historical operations and the pursuit of other opportunities that could have been beneficial to us;

▪we could be subject to litigation related to any failure to complete the Merger;

▪we could potentially lose key personnel during the pendency of the Merger; and

▪under the Merger Agreement, we are subject to certain customary restrictions on the conduct of our business prior to completing the Merger, which restrictions could adversely affect our ability to conduct our business as we otherwise would have done if we were not subject to these restrictions.

The occurrence of any of these events individually or in combination could materially and adversely affect our results of operations, business, and our common stock price, and we may lose some or all the intended benefits of the Merger.

We are substantially dependent on our remaining employees to facilitate the consummation of the Merger.

Our ability to consummate a strategic transaction depends upon our ability to retain our remaining employees required to consummate such a transaction, the loss of whose services may adversely impact the ability to consummate such transaction. As of June 30, 2026, we had only 7 full-time employees. Our ability to successfully complete the Merger depends in large part on our ability to retain key personnel that are necessary to maintain our operations between now and the Effective Time. Despite our efforts to retain these employees, one or more may terminate their employment with us on short notice. Our cash conservation activities may yield other unintended consequences, such as reduced employee morale, which may cause remaining employees to seek alternative employment. The loss of the services of certain employees could potentially harm our ability to consummate the Merger, to run our day-to-day business operations, as well as to fulfill our reporting obligations as a public company.

The Exchange Ratio will not be adjusted based on the market price of our common stock, so the consideration at the closing of the Merger may have a greater or lesser value than at the time the Merger Agreement was signed.

The Exchange Ratio will not change based on changes in the trading price of our common stock. Therefore, if before the completion of the Merger, the market price of our common stock increases from the market price on the date of the Merger Agreement, Avenzo stockholders could then receive merger consideration with substantially higher value for their shares of Avenzo common stock than the parties had negotiated when they established the Exchange Ratio. The Merger Agreement does not include a price-based termination right. Immediately after the Merger, our securityholders as of immediately prior to the Merger are expected to own approximately 2.8% of the outstanding shares of the combined company and former Avenzo securityholders, including purchasers in the Concurrent Financing, are expected to own approximately 97.2% of the outstanding shares of the combined company, subject to certain assumptions, including, but not limited to, in each case, calculated on a fully diluted basis, using the treasury stock method, and subject to certain assumptions, including (i) a valuation for Rallybio of $15.0 million (calculated after giving effect to the expected payment of the distribution of Rallybio's pre Closing cash), (ii) a valuation for Avenzo of $300.0 million, and (iii) the relative capitalization of Rallybio and Avenzo.

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

In general, either we or Avenzo can refuse to complete the Merger if there is a Rallybio Material Adverse Effect (as defined in the Merger Agreement) or a Company Material Adverse Effect (as defined in the Merger Agreement), as applicable, prior to the Closing. However, certain types of changes do not permit either party to refuse to complete the Merger, even if such change could be said to have a material adverse effect on us or Avenzo, including:

▪general business, political or economic conditions generally affecting the industry in which Rallybio or Avenzo operate, including with respect to the imposition of, or adjustments to, tariffs or other trade restrictions;

▪acts of war, the outbreak or escalation of armed hostilities, acts of terrorism, earthquakes, wildfires, hurricanes or other natural disasters, health emergencies, including pandemics and related or associated epidemics, disease outbreaks or quarantine restrictions;

▪changes in financial, banking or securities markets;

▪any change in the stock price or trading volume of Rallybio Common Stock (it being understood, however, that any effect causing or contributing to any change in stock price or trading volume of Rallybio Common Stock may be taken into account in determining whether a material adverse effect with respect to Rallybio has occurred, unless such effects are otherwise excepted from the definition of Rallybio Material Adverse Effect);

▪any failure by Rallybio to meet internal or analysts’ expectations or projections or the results of operations of Rallybio (it being understood, however, that any effect causing or contributing to the failure of Rallybio to meet internal or analysts’ expectations or projections or the results of operations of Rallybio may be taken into account in determining whether a material adverse effect with respect to Rallybio has occurred, unless such effects are otherwise excepted from the definition of Rallybio Material Adverse Effect);

▪any change in, or any compliance with or action taken for the purpose of complying with, any applicable law or GAAP (or interpretations of any applicable law or GAAP);

▪the announcement of the Merger Agreement or the pendency of the Contemplated Transactions; or

▪the taking of any action required to be taken by the Merger Agreement.

If a material adverse change occurs with respect to either party or both parties and we and Avenzo still complete the Merger, the stock price of the combined company following the Closing may suffer and may reduce the value of the Merger to the stockholders of Rallybio, Avenzo or both.

Some of our executive officers and directors have interests in the Merger that are different from our stockholders and that may influence them to support or approve the Merger without regard to the interests of our stockholders.

Certain of our executive officers and directors of Rallybio are parties to arrangements that provide them with interests in the Merger that are different from our stockholders, including severance benefits, the acceleration of equity award vesting and continued indemnification. The Board was aware of and considered these interests, among other matters, in reaching its determination (i) that the terms of the Merger Agreement and the Merger and the other Contemplated Transactions are fair to, advisable and in the best interest of Rallybio and its stockholders; and (ii) to approve and declare advisable the Merger Agreement and the Contemplated Transactions, including the Merger and the issuance of shares of Rallybio common stock to the stockholders of Avenzo pursuant to the Merger Agreement.

Our stockholders may not realize a benefit from the Merger commensurate with the ownership dilution they will experience in connection with the Merger.

If the combined company is unable to realize the full strategic and financial benefits currently anticipated from the Merger, our 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.

Our equityholders will 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, our current stockholders will own a smaller percentage of the combined company than their ownership of Rallybio prior to the Merger. Immediately after the Closing, on a pro forma basis and based upon the number of shares of Rallybio Common Stock expected to be issued in connection with the Merger, pre-Merger equityholders of Avenzo (other than investors in the Concurrent Financing) are expected to own approximately 56.6% of the combined company, pre-Merger equityholders of Rallybio are expected to own approximately 2.8% of the combined company and the investors in the Concurrent Financing are expected to own approximately 40.6% (assuming proceeds from the Concurrent Financing of $215.0 million), in each case, calculated on a fully diluted basis, using the treasury stock method, and subject to certain assumptions, including (i) a valuation for Rallybio of $15.0 million (calculated after giving effect to expected payment of Parent Distributions), (ii) a fixed valuation for Avenzo of $300.0 million, and (iii) the relative capitalization of Rallybio and Avenzo.

The amount of the Rallybio Distributions is uncertain and may be less than currently anticipated, or the Rallybio Distributions may not be made at all.

In connection with the Merger, the Board will declare one or more Rallybio Distributions payable to holders of Rallybio common stock and, if applicable, securities convertible into or exchangeable or exercisable for shares of Rallybio common stock, in an aggregate amount not to exceed the amount by which Rallybio Net Cash equals or exceeds $0. The amount of Rallybio Net Cash available for the Rallybio Distributions is subject to numerous factors, many of which are outside of our control, including the amount of our transaction expenses, the costs of any tail policy associated with our directors’ and officers’ insurance, lease termination costs, payments required to terminate existing agreements, expenses associated with the wind-down of our prior research and development activities, payroll taxes associated with the Rallybio Distributions, severance or change-in-control payments, and other accrued or contingent liabilities. We expect to continue to incur losses in future periods primarily related to the proposed Merger and, as a result, available cash and cash equivalents will continue to decrease prior to the Closing. If these expenses and liabilities are greater than currently estimated, or if unforeseen liabilities arise, the amount available for the Rallybio Distributions will be reduced accordingly. There can be no assurance that the aggregate amount of the Rallybio Distributions will equal the amount that our stockholders currently expect to receive, or that any Rallybio Distribution will be made at all.

Lawsuits may be filed against us and the members of our Board arising out of the proposed Merger, which may delay or prevent the proposed Merger.

Putative stockholder complaints, including stockholder class action complaints, and other complaints may be filed against us, our Board and others in connection with the transactions contemplated by the Merger Agreement. The outcome of litigation is uncertain, and we may not be successful in defending against any such future claims. Lawsuits that may be filed against us, our board, Avenzo, or the Avenzo board could delay or prevent the Merger, divert the attention of our management and employees from our day-to-day business and otherwise adversely affect our financial condition.

During the pendency of the Merger Agreement, we may not be able to enter into a business combination with another party at a favorable price because of restrictions in the Merger Agreement, which could adversely affect our business.

Covenants in the Merger Agreement impede our ability to make acquisitions, subject to specified exceptions relating to fiduciary duties, or complete other mergers, sales of assets or other business combinations pending completion of the Merger. As a result, if the Merger is not completed, we may be at a disadvantage to our competitors during that period. In addition, while the Merger Agreement is in effect, we are generally prohibited from soliciting, initiating, knowingly encouraging or entering into specified extraordinary transactions, such as a merger, sale of assets or other business combination, with any third party, subject to specified exceptions, even if any such transaction could be favorable to our stockholders.

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

The terms of the Merger Agreement prohibit us from soliciting competing proposals or cooperating with persons making unsolicited takeover proposals, except in certain limited circumstances. Our Board may respond to an unsolicited competing proposal if it determines in good faith, after consultation with its outside financial advisor and outside legal counsel, that the unsolicited competing proposal constitutes, or is reasonably likely to result in, a superior competing proposal and, after consultation with its outside legal counsel, that failure to take such action would be inconsistent with the fiduciary duties of the Board. In certain circumstances, and subject to compliance with the Merger Agreement, our Board may change its recommendation to our stockholders if it determines such recommendation change is required to avoid a breach of its fiduciary duties.

Upon termination of the Merger Agreement in certain circumstances, a termination fee of $600,000 may be payable by us to Avenzo if (i)(a) the Merger Agreement is terminated because the Merger has not been consummated by the End Date (as defined in the Merger Agreement) or we (1) fail to obtain the requisite stockholder approval or (2) breach the Merger Agreement, (b) an alternative acquisition proposal was announced or disclosed prior to such termination, and (c) within 12 months of the termination of the Merger Agreement, we enter into a definitive agreement with respect to an alternative transaction or (ii) the Board of changes or withdraws its recommendation in favor of the Merger or approves an alternative transaction, or willfully and intentionally breaches its non-solicitation or certain other obligations under the Merger Agreement.

We have also agreed to reimburse Avenzo for up to $750,000 for third-party expenses, as applicable, if the Merger Agreement is terminated in certain circumstances.

These termination fees and expense reimbursement provisions may discourage third parties from submitting competing proposals to us or our stockholders and may cause our Board to be less inclined to recommend a competing proposal.

We or Avenzo may waive one or more of the conditions to the Merger without recirculation of the related proxy statement/prospectus or resoliciting stockholder approval.

Conditions to our or Avenzo’s obligations to complete the Merger may be waived, in whole or in part, to the extent permitted by law, in certain circumstances unilaterally or by agreement of us and Avenzo. In the event of a waiver of a condition, our Board will evaluate the materiality of any such waiver to determine whether amendment of the related proxy statement/prospectus and re-solicitation of stockholder approval is necessary.

In the event that our Board, in its own reasonable discretion, determines any such waiver is not significant enough to require recirculation of the related proxy statement/prospectus and re-solicitation of our stockholders, it will have the discretion to complete the Merger without seeking further stockholder approval, which decision may have a material adverse effect on our stockholders. For example, if we and Avenzo agree to waive the requirement that the shares of Rallybio 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, and our respective boards of directors elect to proceed with the Closing, Nasdaq may notify the combined company of its determination to delist the combined company’s securities based upon the failure to satisfy the initial inclusion criteria in the Nasdaq application. The combined company may appeal the determination to a hearings panel but such appeal will not stay the suspension and delisting action and Nasdaq may notify the combined company that its common stock will be immediately suspended from trading and delisted.

Our winddown of our historical operations, the sale of assets, the suspension of development activities and the proposed Merger, resulting in the conversion of Avenzo into a public company, will make us subject to the SEC requirements applicable to reporting shell company business combinations. As a result, the combined company will be subject to more stringent reporting requirements, offering limitations and resale restrictions.

According to SEC guidance, the requirements applicable to reporting shell company business combinations apply to any company that sells or otherwise disposes of its historical assets or operations in connection with or as part of a plan to combine with a non-shell private company in order to convert the private company into a public one. We have taken steps to winddown our general and administrative operations that will not be needed after Closing and expect to issue the CVRs in connection with the Closing and, as such, our plan to merge with Avenzo, resulting in the conversion of Avenzo into a public company, will be subject to the SEC requirements applicable to reporting shell company business combinations, which are as follows:

•the combined company will need to file a Current Report on Form 8-K to report the Form 10 type information (“Super 8-K”) after the Closing reflecting its status as an entity that is not a shell company;

•the combined company will not be eligible to use a Form S-3 until 12 full calendar months after the Closing;

•the combined company will need to wait at least 60 calendar days after the filing of the Super 8-K to file a Form S-8 for any equity plans or awards, such as the 2026 Plan and the 2026 ESPP;

•the combined company will be an “ineligible issuer” for three years following the Closing, which will prevent the combined company from (i) incorporating by reference in its Form S-1 filings, (ii) using a free writing prospectus or (iii) taking advantage of the well-known seasoned issuer (“WKSI”) status, even if otherwise eligible based on its public float;

•investors who (i) were affiliates of Avenzo at the time the Merger was submitted for the vote or consent of Avenzo’s stockholders, (ii) receive securities of the combined company in the Merger and (iii) publicly offer or sell such securities will be deemed to be engaged in a distribution of such securities, and therefore would be underwriters with respect to resales of those securities; and

•Rule 144(i)(2) will limit the ability of holders of restricted securities, and any affiliates of the public company to publicly resell Rule 145(c) securities per Rule 145(d), as well as any other “restricted” or “control” securities of the combined company per Rule 144, until one year after the Form 10 information is filed with the SEC. Non-affiliate Rallybio stockholders prior to the Merger will not be subject to such restrictions on public resales of their shares.

The foregoing SEC requirements will increase the combined company’s time and cost of raising capital, offering stock under equity plans, and complying with securities laws. Furthermore, such requirements will add burdensome restrictions on the resale of the combined company common stock by affiliates of Avenzo and any holders of “restricted” or “control” securities of the combined company.

Our equityholders may not receive any payment on the CVRs and the CVRs may otherwise expire valueless.

The right of our equityholders to receive any future payment for or derive any value from the CVRs will be contingent solely upon (i) our and Avenzo’s (or the combined company’s) ability to monetize all or any part of the Legacy Assets pursuant to one or more disposition agreements entered into within the time period specified in the CVR Agreement, and the timing and amount of the consideration received thereunder and (ii) the receipt of cash proceeds from Recursion under the ENPP1 Purchase Agreement. If we and/or Avenzo or the combined company (x) are not successful in entering into disposition agreements related to the Legacy Assets or receiving payments thereunder, or if such payments are not sufficient to result in the payment of any CVR Payments as a result of permitted deductions thereto and (y) do not receive cash proceeds from Recursion pursuant to the ENPP1 Purchase Agreement, in each case within the time period specified in the CVR Agreement, no payments will be made in respect of the CVRs, and the CVRs will expire valueless.

Following termination of the Candid Merger Agreement, Rallybio restarted the evaluation of strategic alternatives. On May 31, 2026, Rallybio entered into an Agreement and Plan of Merger and Reorganization (the “Merger Agreement”) with Avenzo Therapeutics, Inc.(“Avenzo”), a clinical-stage biotechnology company developing next-generation oncology therapies, pursuant to which, among other matters, Farmington Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Rallybio (“Merger Sub”), will merge with and into Avenzo with Avenzo surviving as a wholly owned subsidiary of Rallybio (such transaction, the “Merger”). In connection with the Merger, Rallybio will change its name to Avenzo Therapeutics, Inc. (together with its subsidiaries following the Merger, the “combined company”). The Merger is intended to qualify as a tax-free reorganization for U.S. federal income tax purposes. The Merger will become effective at the time the Certificate of Merger has been duly filed with the Secretary of State of the State of Delaware or such other date and time as is agreed upon by Rallybio and Avenzo and specified in the Certificate of Merger in accordance with the General Corporation Law of the State of Delaware (“DGCL”) (such date, the “Closing Date,” and such time, the “Effective Time”).

In connection with the Merger, Avenzo entered into a subscription agreement (the “Subscription Agreement”) with certain investors, pursuant to which Avenzo has agreed to sell, and such investors have agreed to purchase, shares of Avenzo Common Stock for an aggregate purchase price of $215.0 million, immediately prior to the Effective Time (such transaction, the “Concurrent Financing”). The closing of the Concurrent Financing is conditioned upon the satisfaction or waiver of each of the conditions to the closing of the Merger (the “Closing”) as well as certain other conditions.

Subject to the terms and conditions of the Merger Agreement, at the Effective Time, (a) each then-outstanding share of common stock or preferred stock of Avenzo (each such share, an “Avenzo Share”) (excluding any share described in clauses (b) or (c) below and Avenzo Shares held by stockholders who have exercised and perfected appraisal rights for such shares) will be converted into the right to receive a number of shares of Rallybio common stock, calculated in accordance with the Exchange Ratio as set forth in the Merger Agreement, (b) each Avenzo Share issued in the Concurrent Financing will be converted into the right to receive a number of shares of Rallybio common stock calculated in accordance with the Merger Agreement, (c) any Avenzo Shares held as treasury shares or held or owned by Rallybio, Merger Sub or any subsidiary of Rallybio or Avenzo immediately prior to the Effective Time will be canceled and shall cease to exist, and no consideration shall be delivered in exchange therefor. Each then-outstanding option to purchase Avenzo Shares will be converted into an option to purchase Rallybio common stock, subject to adjustment as set forth in the Merger Agreement.

Under the Exchange Ratio formula in the Merger Agreement, upon the Closing, on a pro forma basis and based upon the number of shares of Rallybio common stock expected to be issued in connection with the Merger and the Concurrent Financing, pre-Merger equityholders of Avenzo (other than investors in the Concurrent Financing) are expected to own approximately 56.6% of the combined company, pre-Merger equityholders of Rallybio will own approximately 2.8% of the combined company and the investors in the Concurrent Financing are expected to own approximately 40.6% (assuming gross proceeds from the Concurrent Financing of $215.0 million), in each case, calculated on a fully diluted basis, using the treasury stock method, and subject to certain assumptions, including (i) a valuation for Rallybio of $15.0 million (calculated after giving effect to the expected payment of the distribution of Rallybio's pre Closing cash), (ii) a valuation for Avenzo of $300.0 million, and (iii) the relative capitalization of Rallybio and Avenzo. The percentage of the combined company that each party’s equityholders will own following the Closing is subject to certain adjustments as described in the Merger Agreement, including the amount of the final Rallybio Net Cash (as defined in the Merger Agreement) at Closing. At any time prior to the Closing, Rallybio will declare distributions (each a “Rallybio Distribution”) of Rallybio Net Cash to holders of Rallybio common stock and, if applicable, securities convertible into or exchangeable or exercisable for shares of Rallybio common stock outstanding as of the applicable record date, subject to the terms of the Merger Agreement.

Immediately prior to the Effective Time, Rallybio and a rights agent (the “Rights Agent”) are expected to enter into a Contingent Value Rights Agreement (the “CVR Agreement”), pursuant to which holders of record of certain Rallybio securities as of the close of business on the last business day prior to the Closing Date will receive one contingent value right (each, a “CVR”) for each outstanding share of Rallybio common stock, pre-funded warrant, Rallybio restricted stock unit or In the Money Parent Option (as defined in the Merger Agreement) held as of such date. Pursuant to the CVR Agreement, each CVR holder will be entitled to receive their pro rata share of all of the net proceeds (including cash or the value of stock to the extent listed on a national exchange, at the time of disposition), if any, received by Rallybio as a result of payments (“CVR Payments”) made to Rallybio of (i) any upfront, milestone, royalty and other payments received under any disposition agreement related to Rallybio’s pre-Merger assets (the “Legacy Assets”), and (ii) all of the cash proceeds, if any, received from Recursion Pharmaceuticals, Inc. ("Recursion") under the Membership Interest Purchase Agreement, dated July 8, 2025, by and among Recursion, Exscientia Ventures I, Inc., Rallybio and Rallybio IPB, LLC (the “ENPP1 Purchase Agreement”). For a period of four months after the Closing Date, Rallybio will use commercially reasonable efforts to effect the disposition of the Legacy Assets with respect to a third party that Rallybio had been in discussions with regarding a disposition prior to the Closing Date, subject to certain limitations. Such net proceeds will be subject to certain permitted deductions, including for applicable tax payments, certain expenses incurred or other liabilities borne by Rallybio or its affiliates in respect of the Legacy Assets, and losses incurred by Rallybio or its affiliates due to a third-party proceeding in connection with such disposition.

Income Tax Expense

Income tax expense includes current taxes on income recognized from the termination of the Candid Merger Agreement which resulted in a termination fee being recorded during the quarter. We continue to maintain a full valuation allowance against our deferred tax assets.

There was no collaboration and license revenue for the three months ended June 30, 2026 due to the expiration of the J&J Collaboration Agreement in April 2026. Collaboration and license revenue was $0.2 million for the three months ended June 30, 2025.

Income Tax Expense

Income tax expense for the period was primarily driven by current taxes on income recognized from the termination of the Candid Merger Agreement which resulted in a termination fee being recorded during the quarter. We continue to maintain a full valuation allowance against its deferred tax assets.

Comparison of the Six Months Ended June 30, 2026 and 2025

The following table summarizes our results of operations:

Revenue

Collaboration and license revenue was $0.2 million and $0.4 million for the six months ended June 30, 2026 and 2025.

Operating Expenses

The following table summarizes our research and development costs for each of the periods presented:

Research and development expenses were $3.6 million for the six months ended June 30, 2026, compared to $11.8 million for the six months ended June 30, 2025. The decrease of $8.2 million in 2026 as compared to 2025 was primarily due to:

▪a $3.8 million decrease in RLYB212 development costs, primarily related to a decrease in clinical costs and other related development costs as a result of our discontinuation of the FNAIT program in April 2025;

▪a $1.0 million decrease in RLYB116 development costs, primarily related to a decrease in clinical and manufacturing costs and other related development costs; and

▪a $3.3 million decrease in personnel expenses, primarily related to lower ongoing headcount during the six months ended June 30, 2026 as compared to the same period in 2025, in addition to a decrease in share-based compensation and no bonus accrual or expected bonus payments for research and development in 2026.

These decreases were partially offset by:

▪an increase in personnel expenses, primarily related to severance recognized in connection with the Merger.

General and administrative expenses were $11.0 million for the six months ended June 30, 2026, compared to $8.4 million for the six months ended June 30, 2025. The increase of $2.6 million in 2026 as compared to 2025 was primarily due to:

▪a $4.9 million increase primarily related to legal fees, professional fees and other related general and administrative expenses, the vast majority of which were incurred in connection with the Merger.

This increase was partially offset by:

▪a $2.3 million decrease in personnel expenses, primarily related to lower ongoing headcount during the six months ended June 30, 2026 as compared to the same period in 2025. In addition, there was a decrease in share-based compensation and a decrease in the bonus accrual in 2026 that was offset by an increase in severance recognized in connection with the Merger.

Total Other Income, Net

Total other income, net, for the six months ended June 30, 2026 was $51.1 million compared to $1.5 million for the six months ended June 30, 2025. The increase in total other income of $49.6 million was primarily a result of the termination of the Candid Merger Agreement, which resulted in a termination fee of $50.0 million paid to us on May 4, 2026.

Income Tax Expense

Income tax expense for the period was primarily driven by current taxes on income recognized from the termination of the Candid Merger Agreement and the related termination fee which was recorded during the quarter. We continue to maintain a full valuation allowance against our deferred tax assets.

Loss on Investment in Joint Venture

Loss on investment in joint venture was $0.9 million for the six months ended June 30, 2025. In July 2025, we sold our interest in REV102 to Recursion which resulted in no loss on investment in joint venture for the six months ended June 30, 2026.