VBIO 10-K & 10-Q changes, risk factors and insider trading
Valion Bio, Inc. · Nasdaq · Pharmaceutical Preparations · CIK 1787740 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “The wind down of our ClearUP business may adversely impact our business, results of operations, financial performance, and reputation.”
New heading “Risks related To Our Contract Development and Manufacturing Organization (CDMO) Subsidiary, Velocity Bioworks”
New heading “Our CDMO business model is unproven and subject to significant execution risk.”
New heading “We may be unable to integrate the acquired Scorpius assets and retain the personnel necessary to operate Velocity Bioworks.”
New heading “Our CDMO operations are subject to extensive regulatory oversight, and failures to comply could result in the suspension or loss of our manufacturing authorizations.”
New heading “We are subject to risks related to the handling, use, and disposal of hazardous materials at our San Antonio manufacturing facility.”
New heading “Our CDMO operations are subject to concentration risk due to our single-site manufacturing footprint.”
New heading “We may face customer concentration risk and uncertainty in CDMO contract structures.”
New heading “Our CDMO activities create potential liability exposure from manufacturing errors and product defects.”
New heading “To the extent we may rely on foreign vendors and suppliers, we may be subject to risks arising from geopolitical instability, trade policy, tariffs, and evolving biosecurity legislation.”
New heading “We will lose our “emerging growth company” status by December 31, 2026 and we will be subject to additional public company reporting and disclosure requirements that may increase our legal and compliance costs and make our common stock less attractive to investors.”
Removed heading “There is substantial doubt about our ability to continue as a going concern.”
Removed heading “Changes in United States and China relations, as well as relations with other countries, and/or regulations may adversely impact our business, our operating results, our ability to raise capital and the market price of our shares.”
Removed heading “We rely on third parties to supply and manufacture our devices, which could cause supply shortages, and we expect to continue to rely on third parties to manufacture and supply our devices.”
Removed heading “We rely on third parties for sales, marketing, manufacturing, distribution, and other business operations.”
Removed heading “The guarantees and warranties we provide on our products could have a material adverse effect on our business, financial condition and results of operations.”
Removed heading “Risks Related to Our Bioelectronic Business and Markets”
Removed heading “Our ability to compete in the sinus, cold and allergy market is unproven.”
Removed heading “Our markets are undergoing continuous change, and our future success will depend on our ability to meet the changing needs of our customers.”
Removed heading “Developing medical technology entails significant technical, regulatory and business risks.”
Removed heading “Customer or third-party complaints or negative reviews or publicity about our company or our products could harm our reputation and brand.”
Removed heading “Our business could be disrupted by catastrophic occurrences and similar events.”
Removed heading “Our business is subject to risks arising from epidemic diseases, such as the recent pandemic.”
Removed heading “Our reliance on vendors in foreign countries, including China, subjects us to risks and uncertainties relating to foreign laws and regulations and changes in relations between the United States and such foreign countries.”
Largest changes
“Tariffs and Trade Restrictions. The United States has imposed, and may in the future expand, tariffs and trade restrictions on goods imported from foreign countries, including materials used in pharmaceutical and biologic manufacturing. Such measures could significantly increase our input costs, disrupt established supplier relationships, or require us to qualify alternative suppliers on an accelerated basis. …”see in full comparison
“For example, the U.S. government, including the SEC, has made statements and taken certain actions that led to changes to U.S. and international relations, and will impact companies with connections to the United States or China, including imposing several rounds of tariffs affecting certain products manufactured in China, imposing certain sanctions and restrictions in relation to China and issuing statements indicating enhanced review of companies with significant China-based operations. …”see in full comparison
“The U.S. government, including the SEC, has made statements and taken certain actions that led to changes to U.S. and international relations, and will impact companies with connections to the United States or China, including imposing several rounds of tariffs affecting certain products manufactured in China, imposing certain sanctions and restrictions in relation to China and issuing statements indicating enhanced review of companies with significant China-based operations. …”see in full comparison
“Velocity Bioworks' operations are subject to regulation by the FDA under Current Good Manufacturing Practice (CGMP) standards, as well as oversight by other federal, state, and local regulatory authorities. Any failure by Velocity Bioworks to maintain CGMP compliance — including deviations in process controls, documentation failures, contamination events, or adverse inspection findings — could result in warning letters, import alerts, consent decrees, facility shutdowns, product recalls, or the withdrawal of manufacturing authorizations. …”see in full comparison
“If any new legislation, executive orders, tariffs, laws and/or regulations are implemented, if existing trade agreements are renegotiated or if the U.S. or Chinese governments take retaliatory actions due to the recent U.S.-China tension, such changes could have an adverse effect on our business, financial condition and results of operations, our ability to raise capital and the market price of our shares. Any additional executive action, legislative action or potential sanctions with China could materially impact our current manufacturing partners and our agreements with them.”see in full comparison
“Changes in United States and China relations, as well as relations with other countries, and/or regulations may adversely impact our business, our operating results, our ability to raise capital and the market price of our shares.”see in full comparison
Full comparison: every changed paragraph (200)
We have a relatively limited operating history and may not be able to execute on our business strategy.
Our operating results may be volatile and may not be a reliable indicator of our future performance.
If we fail to manage our growth effectively, including with respect to our recently in-licensed products from Statera or potential licenses from or acquisitions of other companies, our business could be materially and adversely affected.
We have a history of net losses, and we may not achieve or maintain profitability in the future.
We have identified a material weakness in our internal control over financial reporting associated with staffing levels, which is common for the stage and size of the Company.
We expect that we will need additional capital, which, if obtainable, could dilute the ownership interest of investors.
Cash expenditures associated with our recent in-license from Statera and developments of our ncVNS program may create liquidity and cash flow risks for us.
Our business plan depends heavily on product revenues from our core technology and recently in-licensed pharmaceutical products, the clinical and consumer acceptance of which is at this time unproven.
We have recently licensed biopharmaceutical products, a category in which we have limited to no prior experience. We may not be able to effectively integrate licensed or acquired technology into our operations.
Disruptions at the FDA and foreign regulatory authorities caused by funding shortages, staffing limitations or global health concerns could negatively impact our business.
Economic uncertainty and capital markets disruption, which has been significantly impacted by geopolitical instability, could harm our financial condition and results of operations.
Changes in the relations of the United States with other countries, and China in particular, regulations and/or international trade disputes could have a material adverse effect on our business, financial condition and results of operations.
We rely on third-party service providers to manage our information systems which may not adequately protect the company; additionally, cybersecurity risks and cyber incidents could adversely affect us.
We rely on third parties to supply and manufacture our devices, and we expect to continue to rely on third parties to manufacture and supply our devices.
We depend on our senior management team, and the loss of one or more key personnel or an inability to attract and retain highly skilled personnel may impair our ability to grow our business.
The guarantees and warranties we provide on our products could have a material adverse effect on our business, financial condition and results of operations.
Our markets are undergoing continuous change, and our future success will depend on our ability to meet the changing needs of our customers.
Developing medical technology and biopharmaceutical products entails significant technical, regulatory and business risks.
The size and expected growth of our available market has not been established with precision and may be smaller than we estimate.
Our insurance may not adequately cover our operating risk.
Our business could be disrupted by catastrophic occurrences and similar events.
Changes in the regulatory landscape for our products and product candidates could render our business model contrary to applicable regulatory requirements, and we may be required to seek additional clearance or approval for our products. Additionally, we have relied on guidance documents from FDA to make determinations about the regulatory pathway for future products, which may be interpreted to a different effect by the FDA.
We are subject to consumer protection laws that regulate our marketing practices and prohibit unfair or deceptive acts or practices.
We may not be able to obtain regulatory approval in a timely manner or at all and the results of future clinical trials and pivotal efficacy studies may not be favorable.
Compensatory arrangements with our scientific advisors or consultants could result in increased regulatory scrutiny and ultimately lead to the delay or denial of marketing approval for our product candidates.
We may not be able to obtain fast track designation, breakthrough therapy designation or other expedited pathways for FDA approval of our product candidates, and even if we do, may not actually lead to a faster development or regulatory review or approval process.
We are highly dependent on our intellectual property (“IP”) and our methods of protecting our IP may not be adequate or could be costly. In addition, we may face risks of claims for IP infringement. We may be unable to enforce our intellectual property rights throughout the world.
Our stock price has fluctuated significantly since our initial public offering (“IPO”), and may continue to fluctuate significantly, and investors may not be able to resell the securities that they purchase at or above the price at which they purchased them.
We do not expect to pay any cash dividends for the foreseeable future.
Future issuances of stock or other securities could dilute the holdings of our stockholders and could materially affect the price of our common stock.
If we are unable to comply with the continued listing requirements of the Nasdaq Capital Market, our common stock could be delisted, which could affect our common stock's market price and liquidity and reduce our ability to raise capital.
We are an “emerging growth company” and a “smaller reporting company,” and the reduced public company reporting and disclosure requirements applicable to emerging growth companies and smaller reporting companies may make our common stock less attractive to investors.
If we are unable to implement and maintain effective internal control over financial reporting in the future, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock may decline.
If our operating and financial performance in any given period does not meet any guidance that we provide to the public, the market price of our common stock may decline.
We were originally incorporated in 2016 and began selling our first product in 2019. Additionally, we entered into a license agreement with Statera in February 2025, pursuant to which we acquired a worldwide exclusive license rights from Statera to the late-stage TLR5 agonist Entolimod for the treatment of acute radiation syndrome. In December 2025, we acquired the assets of Scorpius and began operating as a contract development and manufacturing organization (CDMO). Prior to obtaining suchthe license,license from Statera, the Company had no experience in the development of biopharmaceuticals. We also have no history operating as a contract development and manufacturing organization. Accordingly, we have a limited operating history, which makes an evaluation of our future prospects and execution ability difficult. Our revenue and income-producing potential is unproven, and our business model and strategy may continue to evolve. Future revenues are contingent upon several factors, including, without limitation, our ability to successfully develop andour product candidates, scale up our CDMO, scale-up sales of the ClearUP line and future products, including any ncVNS products and/orour TLR5 products that we may develop and commercialize in the future, our ability to develop relationships with channel partners and customers, as well as the clinical and market acceptance of our technology. We may need to make business decisions that could adversely affect our operating results, such as modifications to our pricing strategy, research and development strategy, business structure or operations.
Our ability to obtain additional financing will depend on a number of factors, including, among others, the condition of the capital markets and the other risks described in these risk factors. If any one of these factors is unfavorable, we may not be able to obtain additional funding, in which case, our business could be jeopardized, and we may not be able to continue our operations or pursue our strategic plans. If we are forced to scale down, limit or cease operations, our shareholders could lose all or part of their investment in our Company.
strategic transactions that we may enter into from time to time, including the recent license that we acquired from Statera in February 2025 and any other indications that we may choose to license from Statera in the future under the License Agreement, including our obligations related thereto;
receptiveness of the market to a fundamentally new way of treating target conditions;
intrinsic variability in spending patterns associated with the conduct of clinical trials;
disruptions to the global supply chain and inflationary pressures;
fluctuations in demand for our technology, including seasonal variations; and delays in introducing new technology to market, including product design, manufacturing, marketing cycles, sales and distribution related delays.
We expect that our revenues may be volatile as we develop new technology and product candidates and obtain new customers in the future. The volume and timing of commercial outcomes for our ClearUP product are difficult to estimate, as the adoption of bioelectronic treatments is immature, and the sales cycle may vary substantially from forecasts.
We have a history of net losseslosses, and we may not achieve or maintain profitability in the future.
We have incurred net losses since inception. For the years ended December 31, 20242025 and 2023,2024, we incurred net losses of $5.7$8.9 million and $8.2$5.7 million, respectively, and aton December 31, 2024,2025, we had working capital of $2.4$12.4 million and an accumulated deficit of $43.5$52.6 million. During the years ended December 31, 20242025 and 2023,2024, we used $5.7$7.0 million and $8.5$5.7 million of cash, respectively, for operating activities. The net losses we incur may fluctuate significantly from quarter to quarter and may increase as a result of macroeconomic factors. Additionally, future costs relating to product development and operating activities, including as a result of our obligations under the License Agreement recently entered into with Statera,Statera and our entry to the CDMO business, may be significantly higher than our historical costs.
There is substantial doubt about our ability to continue as a going concern.
Our ability to obtain additional financing will depend on a number of factors, including, among others, the condition of the capital markets and the other risks described in these risk factors. If any one of these factors is unfavorable, we may not be able to obtain additional funding, in which case, our business could be jeopardized and we may not be able to continue our operations or pursue our strategic plans. If we are forced to scale down, limit or cease operations, our shareholders could lose all or part of their investment in our Company.
We have identified a material weakness in our internal control over financial reporting.reporting associated with staffing levels, which is common for the stage and size of the Company.
Cash expenditures associated with our recent in-license from Statera and developments of our ncVNS program may create liquidity and cash flow risks for us.
We incurred significant transaction costs and expect to incur integration costs in connection with our recent in-license of rights to certain products from Statera. While we expected that the transactions costs would be incurred, there are many factors beyond our control that could affect the total amount of the integration expenses associated with the license. Moreover, many of the expenses that will be incurred are, by their nature, difficult to estimate accurately. In addition to integration-related expenses that we will incur, pursuant to the License Agreement, we are obligated to develop and commercialize the licensed products, at our own cost and expense, to make payments to Statera upon achievement of certain milestones, and to make certain royalty payments. In addition,we have certain on-going commitments associated with the development of our ncVNS program. To the extent the integration and/or development and commercialization expenses are higher than anticipated, we may experience liquidity or cash flow issues.
Our business plan depends heavily on revenues from our core technology and recently in-licensed pharmaceutical products, the clinical and consumer acceptance of which is unproven at this time.
Our future growth depends on the commercial success of our technology and our products and product candidates. It is not certain that our product candidates will be successfully developed and pass regulations required for commercial sale. Our target customers willmay choosenot see the value in choosing our technologyproduct forover technical,competitive cost, support or commercial reasons.products. If our target customers do not widely adopt and purchase our technology,products, our future growth will be limited. Further, our resources and investments may not be adequate to achieve the targeted level of manufacturing and sales set out in our business plan.
We have recently licensed biopharmaceutical assets, a category in which we have limited to no prior experience. We may not be able to effectively integrate licensed or acquired assets into our operations (including regulatory, quality, product development, marketing and manufacturing operations).
We have historically operated solely as a medical device company. WeDuring 2025, we have recently in-licensed exclusive rights to late-stage biopharmaceutical products from Statera that will require us to operate in, among others, regulatory, quality, product development, manufacturing and marketing environments with which we have limited experience. While we have hired experienced staff to support this new dimension of the business, we may not be able to successfully create or integrate new capabilities into our overall business. This may ultimately limit or substantively damage our ability to capitalize on the licensed assets.
The wind down of our ClearUP business may adversely impact our business, results of operations, financial performance, and reputation.
On November 12, 2025, after considering all reasonably available options and a broader strategic reassessment, our board of directors approved the wind down of our ClearUP business, which we substantially completed at the end of fiscal year 2025. In connection with the wind down of the ClearUP business, we incurred approximately $347 thousand in charges during the year ended December 31, 2025, and expect to incur additional related expenditures in the range of approximately $20 thousand to $50 thousand in 2026. Additionally, as a result of our exit from the consumer health business, we expect to generate minimal to no revenue until such time that we are able to obtain regulatory approval of and commercialize our other product candidates.
The estimates of the charges and costs that we expect to incur, and the timing thereof, are subject to a number of assumptions and actual results may differ materially from those described above due to various factors, many of which are outside of our control. In addition, we may incur other charges or cash expenditures not currently contemplated due to unanticipated events that may occur as a result of or in connection with the wind down of our commercial health business.
In addition, because of uncertainties with respect to our wind down plan (including those described above), we may not be able to realize the anticipated benefits of the wind down, or any benefits at all, or complete the wind down in the timeframe, on the terms or in the manner we expect, and the costs incurred in connection with such wind down activities may exceed our estimates. If the time to complete the wind down takes longer than expected, if we effect the wind down on terms or in a manner less favorable to us than currently anticipated, or if the actual costs or other non-cash charges exceed our estimates, then our business, operational results, financial position, and cash flows could be adversely affected.
Disruptions at the FDA SEC, other U.S. government agencies and foreign regulatory authorities caused by funding shortages, staffing limitations or global health concerns could hinder their ability to hire, retain or deploy key leadership and other personnel, or otherwise prevent new or modified products from being developed, approved or commercialized in a timely manner or at all, or otherwise prevent those agencies from performing normal business functions on which the operations of our business may rely and which could negatively impact our business.
The ability of the FDA and foreign regulatory authorities to review or approve new products can be affected by a variety of factors, including government budget and funding levels, statutory, regulatory, and policy changes, the FDA’s or foreign regulatory authorities’ ability to hire and retain key personnel and accept the payment of user fees, and other events that may otherwise affect the FDA’s or foreign regulatory authorities’ ability to perform routine functions including a rapid substantial influx of applications from numerous sponsors, as occurred with COVID-19. Average review times at the FDA and foreign regulatory authorities have fluctuated in recent years as a result. In addition, government funding of other government agencies that fund research and development activities is subject to the political process, which is inherently fluid and unpredictable. For example, in recent years, the U.S. government has shut down several times and certain regulatory agencies, such as the FDA, have had to furlough critical FDA employees and stop critical activities and, recently, the current administration has been implementing significant budget cuts, eliminating grant programs and terminating employees throughout many different sectors of the federal government. Disruptions at the FDA and other agencies may also slow the time necessary for new devices and drugs to be reviewed and/or approved by necessary government agencies, which would adversely affect our business.
For example, in recent years, the U.S. government has shut down several times and certain regulatory agencies, such as the FDA, have had to furlough critical FDA employees and stop critical activities and, recently, the current administration has been implementing significant budget cuts, eliminating grant programs and terminating employees throughout many different sectors of the federal government. Disruptions at the FDA and other agencies may also slow the time necessary for new drugs to be reviewed and/or approved by necessary government agencies, which would adversely affect our business. Since the start of the last fiscal year, the U.S. government has shut down from October 1, 2025 through November 12, 2025, and from January 31, 2026 through February 3, 2026. Government shutdowns, if prolonged, could significantly impact the ability of government agencies upon which we rely (such as the FDA and SEC) to timely review and process our regulatory submissions, which could have a material adverse effect on our business. Disruptions at the FDA and other agencies may slow the time necessary for product candidates to be reviewed and/or approved by necessary government agencies, which would adversely affect our business. If a prolonged government shutdown occurs, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business. Further, future government shutdowns could impact our ability to access the public markets and obtain necessary capital in order to properly capitalize and continue our operations. A future shutdown of the U.S. federal government could materially impact the operations of the SEC. For example, the SEC announced that during the fall 2025 U.S. federal government shutdown, it would not review or declare registration statements effective, which resulted in capital raising delays for many private and public companies.
Management's Discussion & Analysis (MD&A)
New heading “Strategic Acquisition and the Biologics Program”
New heading “Regulatory Pathway and Clinical Objectives”
New heading “Divestment and Operational Realignment”
New heading “Launch of Velocity Bioworks (CDMO)”
New heading “Pre-Funded Warrants”
New heading “Registration Rights Agreement”
New heading “Interest Income”
New heading “Interest Expense”
New heading “Discontinued Operations”
New heading “Net Loss From Discontinued Operations”
Removed heading “VNS Clinical Research”
Removed heading “VNS Commercial Strategy”
Removed heading “Postoperative Pain Clinical Research”
Removed heading “ALOM Agreement Termination”
Removed heading “September 2024 Equity Distribution Agreement”
Removed heading “Amended and Restated 2021 Equity Incentive Plan”
Removed heading “Sales and Marketing Expenses”
Removed heading “Sales and Marketing Expenses”
Removed heading “Inventory Valuation and Reserves”
Removed heading “Revenue Recognition”
Largest changes
“As previously disclosed, we encountered disruptions in our supply of various materials and components in 2022 due to the well-documented shortages and constraints in the global supply chain. Although we currently do not anticipate a supply shortage, unforeseen shortages may continue to pose a material risk for the Company in the near term or future. Additionally, high levels of safety stock can (and did in Q4 2024) result in the Company holding significant reserves against future obsolescence. …”see in full comparison
“On February 6, 2026, we entered into Common Stock Purchase Agreement (the "Common Stock Purchase Agreement") whereby we have the right, but not the obligation to sell to the investor the lesser of: (a) $50,000,000 of newly issued shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”), and (b) the Exchange Cap (as defined below), from time to time, at the Company’s sole discretion (each such sale, a “VWAP Purchase”) by delivering an irrevocable written notice to the Investor (each such notice, a “VWAP Purchase Notice”). …”see in full comparison
“On February 6, 2026, we entered into a Common Stock Purchase Agreement (the “Purchase Agreement”) with Tumim Stone Capital, LLC, (“Tumim”) pursuant to which we will have the right, but not the obligation, to sell to the Tumim up to the lesser of: (a) $50,000,000 of newly issued shares of our common stock, par value $0.0001 per share, and (b) the Exchange Cap (as defined below), from time to time, at our sole discretion (each such sale, a “VWAP Purchase”) by delivering an irrevocable written notice to Tumim (each such notice, a “VWAP Purchase Notice”). …”see in full comparison
“In accordance with Nasdaq Marketplace Rule 5810(c)(3)(A), we had a period of 180 calendar days from June 27, 2024, or until December 26, 2024, to regain compliance with the Minimum Bid Price Requirement. We did not regain compliance during the compliance period ending on December 26, 2024. As a result, on December 27, 2024, Nasdaq provided notice that our common stock may be subject to delisting unless we filed an appeal on or before January 3, 2025. We then appealed that determination to a Nasdaq hearings panel. The appeal with the Nasdaq hearings panel was conducted on February 18, 2025. …”see in full comparison
“The Company intends to continue actively monitoring the closing bid price for the Company’s common stock between now and September 15, 2026, and will consider available options to resolve the deficiency and regain compliance with the Minimum Bid Price Requirement. If the Company does not regain compliance within the allotted compliance period, including any extensions that may be granted by Nasdaq, Nasdaq will provide notice that the Company’s common stock will be subject to delisting. The Company would then be entitled to appeal that determination to a Nasdaq hearings panel. …”see in full comparison
“On April 29, 2025, we entered into a securities purchase agreement (the “Helena Purchase Agreement”) with Helena Global Investment Opportunities 1 Ltd. (“Helena”), pursuant to which, subject to the conditions set forth therein, we agreed to sell to Helena, and Helena agreed to purchase from us, up to 8,400 shares of Series B Preferred Stock and warrants to purchase shares of our common stock for a total purchase price of up to $8.4 million in six separate (each, a “Series B Tranche Closing”), subject to satisfaction of certain conditions precedent and other limitations. …”see in full comparison
Full comparison: every changed paragraph (225)
Tivic Health Systems, Inc. (the "Company" or "Tivic Health") is a clinical-stage biopharmaceutical company harnessing the innate immune system to enhance clinical outcomes and address life-threatening conditions.
The cornerstone of Tivic Health’s portfolio is its Toll-like Receptor 5 (“TLR5”) program, led by Entolimod™, a late-stage agonist designed to treat acute radiation syndrome (“ARS”) and mitigate the systemic toxicities associated with medical radiation and chemotherapy. Entolimod is a versatile therapeutic with both prophylactic and mitigative capabilities, effectively preventing or treating the cellular damage caused by genotoxic treatments. The clinical significance of Entolimod has been recognized by the U.S. Food and Drug Administration ("FDA"), which has granted the candidate both Fast Track and Orphan Drug designations for the treatment of ARS. Furthermore, the Company holds Investigational New Drug ("IND") applications for Entolimod in both ARS and advanced oncology, with plans to advance Entolimod and its optimized variant, Entolasta™, into Phase 2 clinical studies for neutropenia and other oncology-related indications.
In December 2025, Tivic Health strategically vertically integrated its operations through the acquisition of Scorpius Holdings' assets via its wholly owned subsidiary, Velocity Bioworks. Based in San Antonio, Texas, Velocity operates as a full-service Contract Development and Manufacturing Organization ("CDMO") in San Antonio, TX. This acquisition included the integration of approximately 40 specialized technical personnel, providing Tivic with direct oversight of the Entolimod manufacturing lifecycle. This strategic move is expected to significantly accelerate our commercialization timeline by ensuring supply chain control and operational agility. Additionally, Velocity functions as a commercial CDMO, with the ability to provide specialized biomanufacturing services to external clients to drive independent profitability and diversify the Company's revenue streams.
Tivic Health is a diversified therapeutics company harnessing the power of the immune and autonomic nervous systems to fight disease and restore health. Tivic Health’s bioelectronic program is developing non-invasive medical devices to meaningfully improve treatment options in neurologic, cardiac and autonomic-related diseases. Tivic Health currently offers a bioelectronic, FDA-approved over-the-counter device (ClearUP™) that treats sinus pain, pressure and congestion. ClearUP is available through online retailers and commercial distributors and at tivichealth.com. Tivic Health is further developing its bioelectronic portfolio with a focus on non-invasive vagus nerve stimulation.
Tivic Health’s biopharma program focuses on immunotherapeutics and the lead product candidate is the late-stage TLR5 agonist, Entolimod™, to treat acute radiation syndrome. The FDA has granted Fast Track and Orphan Drug designation to Entolimod™.
Over the past fiscal year, the Company has successfully executed a transformative strategic pivot. At the beginning of 2025, Tivic Health operated primarily as a consumer health entity focused on its flagship bioelectronic product, ClearUP. Today, we have evolved into a clinical-stage biopharmaceutical company with a robust immunotherapy pipeline and integrated manufacturing capabilities.
Strategic Acquisition and the Biologics Program
A cornerstone of this transition was the execution of an exclusive worldwide licensing agreement with Statera Biopharma, Inc. This agreement added Entolimod™, a late-stage Toll-like Receptor 5 (TLR5) agonist, to our clinical pipeline. We further expanded this portfolio by exercising our option for an exclusive license to the neutropenia indication for both Entolimod and our second-generation, immune-optimized candidate, Entolasta™.
These assets represent a high-value investment opportunity, having been the subject of over 40 clinical and preclinical trials supported by $140 million in prior capital, including $35.6 million in non-dilutive funding from the Department of Defense (DoD), DTRA, NASA, and the NIH. The FDA has recognized the clinical importance of Entolimod by granting it Fast Track and Orphan Drug designations for the prevention and treatment of Acute Radiation Syndrome (ARS).
Regulatory Pathway and Clinical Objectives
Our immediate operational priority is the validation of the manufacturing process required for the submission of a Biologics License Application ("BLA") to the FDA. While the BLA is our primary domestic objective, we are also exploring opportunities for the emergency use of Entolimod in select international markets prior to formal U.S. commercialization.
Beyond ARS, we are leveraging our active IND application to initiate Phase 2 clinical studies targeting neutropenia and other oncology-related indications. Entolimod’s mechanism of action—activating the NF-κB pathway upstream of G-CSF—offers distinct therapeutic advantages. Clinical data (Krivokrysenko, et al., PLOS One, 2015) demonstrates that Entolimod not only stimulates hematopoiesis but also reduces apoptosis and accelerates tissue regeneration in the gastrointestinal tract. We believe these anti-apoptotic and prophylactic properties position our TLR5 agonists as compelling alternatives or adjunctive therapies to currently marketed G-CSF treatments.
Divestment and Operational Realignment
To ensure the disciplined allocation of resources toward our high-growth biologics program, the Board of Directors approved the wind-down of the ClearUP business and the cessation of active research into non-invasive cervical vagus nerve stimulation ("ncVNS"). We expect the wind-down of the consumer business to be substantially complete by year-end. In connection with this exit, the Company incurred approximately $347,000 in charges during 2025, with an additional $20,000 to $50,000 expected to finalize the process. While we will generate minimal revenue during this transition, we are retaining all intellectual property associated with our bioelectronic research for future monetization.
Launch of Velocity Bioworks (CDMO)
In December 2025, the Company launched Velocity Bioworks, Inc., a wholly owned subsidiary operating as a CDMO. Velocity serves a dual strategic purpose: it de-risks our Entolimod commercialization plan by providing internal control over the manufacturing and validation timeline, and it creates a new vertical revenue by offering specialized services to external partners.
Velocity Bioworks, Inc. offers biomanufacturing development work, analytic support, and CGMP manufacturing capability. While we are in the early stages of market entry, this integrated model is designed to drive operational efficiencies and provide a path toward diversified profitability.
Bioelectronic medicine is an emerging market. Since our formation in September 2016, we have devoted substantially all of our efforts to the development and marketing of our proprietary technology platform to provide noninvasive, drug-free treatments and treatment candidates for various diseases and conditions. In 2019, we launched ClearUP in the U.S. market. ClearUP is approved by the FDA for sale in the U.S. for the two FDA-approved indications noted above. We currently sell ClearUP directly to consumers online through our own website and to resellers such as McKesson-affiliate Simply Medical, Cardinal Health and AmerisourceBergen. Through our online retailers, ClearUP is available through Amazon, McKesson, Optum Store, Walmart, Target, Best Buy, Cardinal Health and FSA/HSA Store. We have also developed a proprietary approach to precision, non-invasive cervical vagus nerve stimulation based on our experience building evidence-based bioelectronic therapies.
In early 2025, through the license with Statera, Tivic added biologic immunotherapy to its clinical pipeline. Biopharmaceuticals (also known as biologics) refers to pharmaceutical products that are extracted from, manufactured in or semi-synthesized from biological sources.
We acquired a worldwide exclusive license from Statera Biopharma to the late-stage TLR5 agonist Entolimod for the treatment of ARS. In addition, we acquired an exclusive option to license five additional indications and clinical use cases for Entolimod and its derivative, Entolasta.
Following the licensing of Entolimod and Entolasta, we hired Michael Handley, previous Chief Executive Officer, President and Chairman of Statera Biopharma, as Chief Operating Officer of Tivic and President of our new Tivic Biopharma division, a role in which he will lead the establishment of a biopharmaceutical capability within Tivic.
Effective March 7, 2025, we implemented a reverse stock split of our issued and outstanding shares of common stock at a ratio of 1-for-17.
On March 18, 2025, we entered into an Equity Purchase Agreement, pursuant to which we will have the right, but not the obligation, to sell up to $25 million shares of Company common stock to the investor from time to time over a two-year period, subject to certain conditions precedent and other limitations.
VNS Clinical Research
In May 2024, we announced the final results of our pilot research study with Feinstein. Through this collaboration, we have confirmed the effectiveness of our patent-pending ncVNS approach, which induces responses in the autonomic, cardiac, and central nervous systems and can be expected to have clinical utility in several major disease areas.
Compared to baseline measurement, our ncVNS intervention resulted in a 97% increase in the root mean square of successive differences (“RMSSD”) measure of heart rate variability, which is a widely accepted proxy for vagus nerve activity.
Measurements of brain activity using EEG demonstrated that our ncVNS intervention increased frontal theta power by 24% and reduced gamma power in several brain regions, including a 66% reduction in frontal gamma power. These changes in brain activity are consistent with reduced arousal and anxiety.
During ncVNS stimulation, subjects had sustained pupil constriction, a 9.5% reduction in pupil diameter, an outcome associated with activation of the parasympathetic nervous system.
The magnitude of our ncVNS data imply potential for greater clinical effects and enhanced reproducibility than demonstrated by previous studies of non-invasive VNS devices. These results in healthy subjects suggest our ncVNS approach may have clinical utility in several patient populations, including those with post-traumatic stress disorder, cardiac disease, inflammatory conditions, and ischemic stroke, among others.
In May 2024, we entered into a Collaboration and Research Support Agreement with Feinstein to further optimize responses in Autonomic Nervous System (“ANS”) function in response to our ncVNS. Total length of the project is expected to be one year. The study, being run by Feinstein, will identify device parameters, including frequency and duration of treatment, that optimally influence ANS function.
In September 2024, we announced approval for the contracted clinical work by Northwell Health's Institutional Review Board, required before enrollment of subjects.
In October 2024, we announced enrollment of the first subject in this optimization study for our patent pending, non-invasive vagus nerve stimulation device. The results will be used to inform clinical indication priority and commercial development. Enrollment was completed in November 2024.
VNS Commercial Strategy
In September, 2024, we announced our partnership with Fletcher Spaght, Inc (“FSI”), a leading healthcare growth strategy firm, to accelerate development of our commercial strategy for ncVNS. The firm has begun a comprehensive market assessment of our ncVNS technology, drawing from clinical outcomes from our Phase 1 trial. FSI and Tivic initially identified approximately 30 potential medical use cases for our ncVNS technology in neurologic, cardiac, psychiatric and autonomic nervous system diseases. FSI is now working closely with our scientific and clinical leadership to identify the strongest market entry points by interviewing clinical key opinion leaders and payers. The work with FSI will help us narrow our go-to-market strategy, clinical study plans, reimbursement pathway, and product development pipeline for our vagus nerve stimulation program.
Postoperative Pain Clinical Research
In August 2024, we received the final report from an investigator-led double-blind study funded by the Icahn School of Medicine at Mount Sinai on the use of microcurrent as an alternative for the treatment of pain following functional endoscopic sinus surgery, rhinoplasty and other forms of sino-nasal surgeries. No statistically significant differences were identified between users of the active microcurrent device and sham device. Given the relatively small market size and lack of definitive indicators of clinical utility, we currently have no plans to fund additional research in this area, prioritizing, instead, our work on vagus nerve stimulation.
ALOM Agreement Termination
In August, 2024, we terminated the Fulfillment Services Agreement with ALOM Technologies Corporation (“ALOM”) in furtherance of our efforts to continue to reduce both direct and indirect costs associated with product manufacturing and distribution of our ClearUP device. ALOM provided assembly, procurement, storage, returns, and fulfillment services to our end customers and retailers within the United States. We are now utilizing third-party logistics and storage services from alternate suppliers without material minimums and have established in-house assembly and testing capabilities. We completed the transition with no disruptions to service and foresees current capacity will be sufficient to meet demand for the foreseeable future.
September 2024 Equity Distribution Agreement
In September 2024, we entered into an Equity Distribution Agreement (the “Distribution Agreement”) with Maxim Group LLC (“Maxim”), pursuant to which we may offer and sell, from time to time, through or to Maxim, as sales agent or principal, shares of our common stock. We will pay Maxim a commission of 3% of the aggregate gross proceeds from each sale of shares. We also agreed to reimburse Maxim for certain specified fees and expenses of up to $40 thousand, plus an additional $5 thousand for each bringdown. The agreement will terminate upon the earlier of (i) the sale of all shares of common stock having an aggregate offering price of $10 million; (ii) twenty four months from the date of the agreement; (iii) the mutual termination of the agreement upon fifteen days' prior written notice; and (iv) as otherwise permitted therein. In 2024, we sold a total of 193,161 shares of our common stock with gross proceeds of $1.2 million. The Company paid Maxim $37 thousand in commissions. Net proceeds to the Company, after deducting commissions and offering expenses paid by the Company, was approximately $1.1 million.
Appointment of LisaMichael WolfK. Handley as interim Chief FinancialExecutive Officer
In March 2026, Michael K. Handley was appointed as Chief Executive Officer and director. Mr. Handley succeeds Jennifer Ernst as Chief Executive Officer. Prior to being appointed as Chief Executive Officer, Mr. Handley was Chief Operating Officer and President of our biopharma division since joining the Company in February 2025. Mr. Handley previously was the Chief Executive Officer of Statera Biopharma, Inc. from July 2021 to February 2025 and brings over two decades of cross-functional experience in drug/device commercialization, regulatory/clinical affairs, operations, strategic transactions, market development and partnering/licensing.
Effective October 1, 2024, Lisa Wolf was appointed as the Company’s new interim Chief Financial Officer and Principal Financial and Principal Accounting Officer. Ms. Wolf was retained to provide such services as a non-employee consultant of the Company. Ms. Wolf has played a key role in supporting our accounting and Commission reporting functions on an out-sourced basis since June 2022, when she joined Murdock Martell as Vice President.
ResignationAppointment of KimberlyLisa BambachWolf as interim Chief Financial Officer
Effective October 1, 2024, Lisa Wolf was appointed as the Company’s interim Chief Financial Officer and Principal Financial and Principal Accounting Officer. In July 2025, Ms. Wolf was employed by the Company as the Chief Financial Officer. Ms. Wolf has played a key role in supporting our accounting and Commission reporting functions on an out-sourced basis since June 2022, when she joined Murdock Martell as Vice President.
On September 12, 2024, Kimberly Bambach tendered her resignation from her role as interim Chief Financial Officer of the Company, effective October 1, 2024. Ms. Bambach continues to provide services to the Company in an advisory role after the effective date of her resignation.
On June 28, 2024, we received a notification letter from the Listing Qualifications Department of the Nasdaq notifying us that, because the closing bid price for our common stock was below $1.00 per share for 33 consecutive business days, we are not currently in compliance with the Minimum Bid Price Requirement. The notification had no immediate effect on the listing of our common stock on the Nasdaq Capital Market.
In accordance with Nasdaq Marketplace Rule 5810(c)(3)(A), we had a period of 180 calendar days from June 27, 2024, or until December 26, 2024, to regain compliance with the Minimum Bid Price Requirement. We did not regain compliance during the compliance period ending on December 26, 2024. As a result, on December 27, 2024, Nasdaq provided notice that our common stock may be subject to delisting unless we filed an appeal on or before January 3, 2025. We then appealed that determination to a Nasdaq hearings panel. The appeal with the Nasdaq hearings panel was conducted on February 18, 2025. On March 6, 2025, we received a letter from the Nasdaq hearings panel granting our request for continued listing on the Nasdaq Capital Market provided that we implemented the reverse stock split on March 7, 2025 and demonstrated compliance with all such continued listing requirements for the Nasdaq Capital Market as of March 20, 2025.
The contemplated reverse split was subsequently completed in the ratio of 1-for-17 and went effective on March 7, 2025. As of March 21, 2025, we believe that we have regained compliance; however, we have not yet received confirmation from Nasdaq and no assurances can be provided.
Amended and Restated 2021 Equity Incentive Plan
On August 9, 2024, we adopted the Amended and Restated 2021 Equity Incentive Plan (the “A&R 2021 Plan”), which amends and restates our 2021 Equity Incentive Plan in full to, amongst other things, increase the number of shares of common stock authorized for issuance thereunder from 5,434 shares to 58,823 shares. Our Board of Directors (“Board”) unanimously approved the adoption of the A&R 2021 Plan, subject to stockholder approval, on June 15, 2024, and our stockholders approved the A&R 2021 Plan at our 2024 Annual Meeting of Stockholders held on August 9, 2024.
Effective March 7, 2025, our Board approved a reverse stock split of our issued and outstanding shares of common stock, par value $0.0001 per share, at a ratio of 1-for-17. As a result of the reverse stock split, the total number of shares of common stock held by each stockholder of the Company were converted automatically into the number of shares of common stock equal to the number of issued and outstanding shares of common stock held by each such stockholder immediately prior to the reverse stock split divided by 17. We issued one whole share of the post reverse stock split common stock to any stockholder who otherwise would have been entitled to receive a fractional share as a result of the reverse stock split. As a result, no fractional shares were issued in connection with the reverse stock splitsplit, and no cash or other consideration was paid in connection with any fractional shares that would otherwise have resulted from the reverse stock split. Also, all options, warrants and other convertible securities of the Company outstanding immediately prior to the reverse stock split were adjusted by dividing the number of shares of common stock into which such options, warrants and other convertible securities were exercisable or convertible by 17 and multiplying the exercise or conversion price thereof by 17, all in accordance with the terms of the plans, agreements or arrangements governing such options, warrants and other convertible securities and subject to rounding pursuant to such terms. There was no change to the par value, or authorized shares, of either the common stock or preferred stock, as a result of the reverse stock split.
Effective August 23, 2023, the Company implemented a reverse stock split of the Company's issued and outstanding shares of common stock at a ratio of 1-for-100. As a result of the reverse stock split, the total number of shares of Common Stock held by each stockholder of the Company were converted automatically into the number of shares of Common Stock equal to the number of issued and outstanding shares of Common Stock held by each such stockholder immediately prior to completion of the reverse stock split divided by 100. The Company issued one whole share of the post reverse stock split common stock to any stockholder who otherwise would have been entitled to receive a fractional share as a result of the reverse stock split. As a result, no fractional shares were issued in connection with the reverse stock splitsplit, and no cash or other consideration was paid in connection with any fractional shares that would otherwise have resulted from the reverse stock split. Also, all options, warrants and other convertible securities of the Company outstanding immediately prior to the reverse stock split were adjusted by dividing the number of shares of common stock into which such options, warrants and other convertible securities were exercisable or convertible by 100 and multiplied the exercise or conversion price thereof by 100, all in accordance with the terms of the plans, agreements or arrangements governing such options, warrants and other convertible securities and subject to rounding pursuant to such terms. There was no change to the par value, or authorized shares, of either the common stock or preferred stock, as a result of the reverse stock split.
On April 29, 2025, the Company entered into a Securities Purchase Agreement (the "Preferred Purchase Agreement”) with an investor (the "Investor”), pursuant to which, subject to the conditions set forth therein, the Company shall sell to the Investor, and the Investor shall purchase from the Company, up to 8,400 shares of the Company’s Series B Preferred Stock and warrants ("Investor Warrants”) to purchase shares of the Company’s common stock fora total purchase price of up to $8,400,000 (the "Tranched Financing”) in several tranche closings (each, a "Tranche Closing”).
The Preferred Purchase Agreement provides that the Tranched Financing shall be conducted through six separate Tranche Closings pursuant to which, subject to satisfaction of the applicable closing conditions set forth in the Preferred Purchase Agreement, the Company shall sell and issue the Investor up to an aggregate of 8,400 shares of Series B Preferred Stock as follows: (i) 700 shares of Series B Preferred Stock, for $700,000, in the initial Tranche Closing, which was consummated on June 25, 2025; (ii) 700 shares of Series B Preferred Stock, for $700,000, in the second Tranche Closing, which shall be consummated 10 trading days after the initial Tranche Closing; (iii) 1,750 shares of Series B Preferred Stock, for $1,750,000, in the third Tranche Closing, which shall be consummated 20 trading days after the second Tranche Closing; (iv) 1,750 shares of Series B Preferred Stock, for $1,750,000, in the fourth Tranche Closing, which shall be consummated 20 trading days after the third Tranche Closing; (v) 1,750 shares of Series B Preferred Stock, for $1,750,000, in the fifth Tranche Closing, which shall be consummated 20 trading days after the fourth Tranche Closing; and (vi) 1,750 shares of Series B Preferred Stock, for $1,750,000, in the final Tranche Closing, which shall be consummated 20 trading days after the fifth Tranche Closing.
In addition to the shares of Series B Preferred Stock to be sold and issued to the Investor in the Tranched Financing, at each Tranche Closing the Company shall also issue the Investor an Investor Warrant to purchase that number of shares of Company common stock equal to 30% of shares of common stock issuable upon conversion in full of the shares of Series B Preferred Stock issued at the same Tranche Closing. Each Investor Warrant shall be immediately exercisable (subject to certain beneficial ownership limitations), expire five years from the date of issuance, and have an initial exercise price equal to the average closing price of the Company’s common stock during the prior five trading days preceding each Tranche Closing (as may be adjusted for stock dividends, subdivisions, or combinations in the manner described in the Investor Warrant). In the event that Investor Warrants issued to the Investor in a subsequent Tranche Closing have a lower exercise price than the Investor Warrants outstanding as of such later Tranche Closing, immediately after the Tranche Closing the exercise price of all outstanding Investor Warrants held by the Investor shall automatically be reduced to equal such lower exercise price of the Investor Warrants issued in such Tranche Closing.
In 2025, through a series of tranched closings, the Company sold an aggregate of 4,900 shares of Series B Preferred Stock and common warrants to purchase an aggregate of 509,987 shares of common stock for a total of $4.9 million in a series of registered public offerings. Net proceeds after deducting agent placement fees and offering costs were $4.1 million. The net proceeds were allocated between the common stock and Common Warrants issued in the offering based on the relative fair values, which were $3.0 million and $1.1 million, respectively. The warrants have an exercise price of $3.04 per share and expire one year from the date of issuance.
On December 9, 2025, the Company entered into a Securities Purchase Agreement (the “Preferred Purchase Agreement”) with certain institutional investors (collectively, the “Preferred Offering Investors”), pursuant to which, subject to the conditions set forth therein, the Company agreed to sell to the Preferred Offering Investors, and the Preferred Offering Investors agreed to purchase from the Company, up to 75,000 shares of the Company’s newly designated Series C Non-Voting Convertible Preferred Stock (“Series C Preferred Stock”) and warrants (“Preferred Offering Warrants”) to purchase shares of Common Stock for a total purchase price of up to $75,000,000 (the “Preferred Offering”) in several tranche closings (each, a “Tranche Closing”).
The Preferred Purchase Agreement provides that the Preferred Offering shall be conducted through a series of separate Tranche Closings pursuant to which, subject to satisfaction of the applicable closing conditions set forth in the Preferred Purchase Agreement, the Company shall sell and issue the Preferred Offering Investors up to an aggregate of 75,000 shares of Series C Preferred Stock, at a price of $1,000 per share, as follows: (i) 12,000 shares of Series C Preferred Stock, for $12,000,000 in gross proceeds to the Company, in the initial Tranche Closing, which was consummated on December 10, 2025; (ii) 6,000 shares of Series C Preferred Stock, for $6,000,000 in gross proceeds to the Company, in the second Tranche Closing, which shall be consummated three business days after the Second Tranche Closing Conditions (as defined below) have been satisfied or waived; and (iii) up to an aggregate of 57,000 shares of Series C Preferred Stock, for an aggregate of up to $57,000,000 in a series of subsequent Tranche Closings (each a “Subsequent Tranche Closing,” and together the “Subsequent Tranche Closings”), which shall be consummated when the Subsequent Tranche Closing Conditions (as defined in the Preferred Purchase Agreement) have been satisfied or waived, including but not limited to that the aggregate stated value of the Series C Preferred Stock outstanding does not exceed $3,000,000 and certain additional volume and price conditions are met.
In addition to the shares of Series C Preferred Stock to be sold and issued to the Investors in the Preferred Offering, at each Tranche Closing the Company shall also issue the Preferred Offering Investors an aggregate of Preferred Offering Warrants to purchase that number of shares of Company common stock equal to 50% of shares of common stock issuable upon conversion in full of the shares of Series C Preferred Stock issued in connection with the same Tranche Closing. Each Preferred Offering Warrant shall be immediately exercisable (subject to certain beneficial ownership limitations and Stockholder Approval), expire five years from the date of issuance, and have an exercise price of $2.2310 (as may be adjusted for stock dividends, subdivisions, or combinations in the manner described in the Preferred Offering Warrant).
What changed in the latest 10-Q
Risk Factors
New heading “The contemplated reverse stock split could cause our stock price to decline relative to its value before the split and decrease the liquidity of shares of our Common Stock.”
New heading “Even if we effect the Reverse Stock Split of our common stock, we cannot assure you that the market price of our common stock will remain high enough for such Reverse Stock Split to have the intended effect of complying with Nasdaq’s minimum bid price requirement.”
Largest changes
“The contemplated reverse stock split could cause our stock price to decline relative to its value before the split and decrease the liquidity of shares of our Common Stock.”see in full comparison
“Even if we effect the Reverse Stock Split of our common stock, we cannot assure you that the market price of our common stock will remain high enough for such Reverse Stock Split to have the intended effect of complying with Nasdaq’s minimum bid price requirement.”see in full comparison
“There is no assurance that the Reverse Stock Split will be approved by our stockholders or will be implemented by any certain date. In the case of approval, there is no assurance that effecting the Reverse Stock Split will not cause an actual decline in the value of our outstanding common stock. …”see in full comparison
“We plan to effect the Reverse Stock Split in order to achieve a sufficient increase in our stock price to enable us to continue qualify for listing on The Nasdaq Capital Market and to satisfy Nasdaq’s minimum bid price requirement of $1.00. Even if Reverse Stock Split occurs, there can be no assurance that the market price of our common stock following the Reverse Stock Split will remain at the level required for continuing compliance with Nasdaq’s requirement. It is not uncommon for the market price of a company’s common stock to decline in the period following a reverse stock split. …”see in full comparison
“At the Company’s planned Special Meeting of Stockholders, to be held August 14, 2026, the Company’s stockholders are being asked to approve a proposal to grant the Company’s board of directors (the “Board”) discretionary authority to amend our amended and restated certificate of incorporation to effect a reverse stock split of all of our issued and outstanding shares of common stock at a ratio of not less than 1-for-5 and not greater than 1-for-50 (the “Reverse Stock Split”), such ratio to be determined by our Board at any time within twelve months from the date that stockholder approval is …”see in full comparison
Full comparison: every changed paragraph (6)
ManagementOther than as described below, management is unaware of any material updates or changes to the risk factors previously disclosed in our Annual Report; provided, however, additional risks not currently known or currently material to us may also harm our business.
The contemplated reverse stock split could cause our stock price to decline relative to its value before the split and decrease the liquidity of shares of our Common Stock.
At the Company’s planned Special Meeting of Stockholders, to be held August 14, 2026, the Company’s stockholders are being asked to approve a proposal to grant the Company’s board of directors (the “Board”) discretionary authority to amend our amended and restated certificate of incorporation to effect a reverse stock split of all of our issued and outstanding shares of common stock at a ratio of not less than 1-for-5 and not greater than 1-for-50 (the “Reverse Stock Split”), such ratio to be determined by our Board at any time within twelve months from the date that stockholder approval is obtained, without further approval or authorization of our stockholders, with the exact ratio to be determined by the Board without further approval or authorization of our stockholders.
There is no assurance that the Reverse Stock Split will be approved by our stockholders or will be implemented by any certain date. In the case of approval, there is no assurance that effecting the Reverse Stock Split will not cause an actual decline in the value of our outstanding common stock. The liquidity of the shares of our common stock may be affected adversely given the reduced number of shares that will be outstanding following the Reverse Stock Split, especially if the market price of our common stock does not increase as a result of the Reverse Stock Split, if implemented in the future. In addition, the Reverse Stock Split may increase the number of stockholders who own odd lots (less than 100 shares) of our common stock, creating the potential for such stockholders to experience an increase in the cost of selling their shares and greater difficulty effecting such sales.
Even if we effect the Reverse Stock Split of our common stock, we cannot assure you that the market price of our common stock will remain high enough for such Reverse Stock Split to have the intended effect of complying with Nasdaq’s minimum bid price requirement.
We plan to effect the Reverse Stock Split in order to achieve a sufficient increase in our stock price to enable us to continue qualify for listing on The Nasdaq Capital Market and to satisfy Nasdaq’s minimum bid price requirement of $1.00. Even if Reverse Stock Split occurs, there can be no assurance that the market price of our common stock following the Reverse Stock Split will remain at the level required for continuing compliance with Nasdaq’s requirement. It is not uncommon for the market price of a company’s common stock to decline in the period following a reverse stock split. If the market price of our common stock declines following the effectuation of the Reverse Stock Split, the percentage decline may be greater than would occur in the absence thereof. In any event, other factors unrelated to the number of shares of our common stock outstanding, such as negative financial or operational results, could adversely affect the market price of our common stock and thus jeopardize our ability to meet or maintain Nasdaq’s minimum bid price requirement and overall continued listing on The Nasdaq Capital Market.
Management's Discussion & Analysis (MD&A)
New heading “Series A Issuances”
New heading “From Discontinued Operations”
Removed heading “Operating Expenses”
Largest changes
“Additionally, U.S. and global markets are continuing to experience volatility and disruption as a result of geopolitical tensions, including the ongoing military conflicts between Russia and Ukraine and Israel and Hamas. Although the length and impact of the ongoing military conflicts is highly unpredictable, the conflicts in Ukraine and Israel/Palestine could continue to lead to market disruptions, including significant volatility in commodity prices, credit and capital markets, as well as further supply chain interruptions. …”see in full comparison
As discussed elsewhere in this Quarterly Report,see in full comparisontheourworldbusinesshasiscontinuedsubject toberisks,affected byincluding the ongoing conflict between Russia and Ukraine and the more recent conflict among the U.S., Israel, Hamas and Iran, economic uncertainty in human capital management ("HCM”) and certain other macroeconomicfactors. The general consensus among economists continues to suggest that we should expect a higher recession risk to continue for the near term. Climate change continues to be an intense topic of public discussionandisgeopoliticaladding additional challenges and financial burden due to impending preparations and changes in the customer mindset.factors. These factors, amongst other things, could result in further economic uncertainty and volatility in the capital markets in the near term, and could negatively affect our operations. Effects ofthe pandemic andrecent economic volatility have negatively impacted our business in variousways over the last three years,ways, including as a result of global supply chainconstraints at least partially attributable to the pandemic.constraints. We will continue to monitor material impacts on our HCM strategies, including the potential of employee attrition, amongst other things.
As a result of these global issues and other macroeconomic factors, it has been difficult to accurately forecast our revenues or financialsee in full comparisonresults, especially given the geopolitical issues, recent change in administration, inflation, changes in the Federal Reserve interest rate and the potential fora recession.results. In addition, while the potential impact and duration of these issues on the economy and our business may be difficult to assess or predict, these world events have resulted in, and may continue to result in, significant disruption of global financial markets, and may reduce our ability to access additional capital, which could negatively affect our liquidity in the future. Our results of operations could be materially below our forecasts as well, which could adversely affect our results of operations, disappoint analysts and investors, or cause our stock price to decline. Furthermore, a decrease in orders in a given period could negatively affect our revenues in future periods.
see in full comparisonTheUnder the current administration, the UnitedStatesStates' tariff policy hasrecentlybecomeimplementedincreasingly aggressive, leading to the implementation orthreatenedthreat to implement tariffs on certain imported goods, including on certain items imported from China, Canada and other countries. In addition, China, Canada and other countries have imposed, or threatened to impose, tariffs on a wide range of American products and placed restrictions on the export of certain items in retaliation for these American tariffs. As a result, there is a concern that the imposition ofadditionaltariffs by the United States could result in the adoption ofadditionalretaliatory tariffs orexportother restrictions byChina, Canada and/orother countries.ThisAlthough the validity of the tariffs has been challenged, and some tariffs struck down by the Supreme Court, this has recently led to significant volatility in the capital markets and increased economic uncertainty. Additionally, any resulting trade war could negatively impact our business. The imposition of tariffs on items imported by us from China, Canada or other countries could increase our costs and could result in lowering our gross margin on products sold.
“In April 2026, Velocity Bioworks, Inc., the Company's wholly-owned subsidiary, entered into a Purchase, Collaboration, and Strategic Partnership Agreement (the "Larmor Agreement") with LarmorBio, Inc., a Delaware corporation ("Larmor"), pursuant to which Velocity engaged Larmor to design, develop, and install a prototype real-time cell monitoring and analytics system tailored to Velocity's bioreactor specifications. Under the terms of the Larmor Agreement, Velocity has exclusive use of the system and associated technology within the CDMO sector for a specified period of time. …”see in full comparison
Full comparison: every changed paragraph (51)
Valion Bio, Inc. (the "Company" or "Valion"), formerly known as Tivic Health Systems, Inc. is a late-stage biopharmaceutical company whose lead program is Entolimod™.Entolimod. Entolimod is a recombinant biologic with Toll-like Receptor 5 ("TLR5") agonist activity. Entolimod has an extensive preclinical and clinical data package supporting development as a medical countermeasure (MCM) for Acute Radiation Syndrome (ARS) and it subsyndromes, as well as for adjunct therapy for oncology indications, such as neutropenia.
The cornerstone of Valion’s portfolio is its TLR5 program, led by Entolimod™,Entolimod, a late-stage recombinant biological agonist designed to mitigate or treat acute radiation syndrome ("ARS”) and mitigate or treat the systemic toxicities associated with medical radiation and chemotherapy. Entolimod is a versatile therapeutic with both prophylactic and mitigative capabilities, effectively preventing or treating the cellular damage caused by genotoxic treatments. The clinical significance of Entolimod has been recognized by the U.S. Food and Drug Administration ("FDA"), which has granted the candidate both Fast Track and Orphan Drug designations for the treatment of ARS. Furthermore, the Company holds Investigational New Drug ("IND") applications for Entolimod in both ARS and advanced oncology, with plans to advance Entolimod and its optimized variant, Entolasta™, into Phase 2 clinical studies for neutropenia and other oncology-related indications.
The shares of Common Stock purchased pursuant to a VWAP Purchase (the "Shares”) will be purchased at the VWAP Purchase Price, which will be determined pursuant to a formula set forth in the Purchase Agreement. If we elect to use a one-trading-day valuation period in the VWAP Purchase Notice (the "One-Day Valuation Period”), the VWAP Purchase Price under the Purchase Agreement will be equal to 97% of the volume-weighted average price ("VWAP”) of our Common Stock on the one trading day during such One-Day Valuation Period, subject to adjustment as provided in the Purchase Agreement, following receipt of the Shares by the Tumim. If we elect to use a One-Day Valuation Period to determine the VWAP Purchase Price in the VWAP Purchase Notice, such VWAP Purchase Notice shall direct Tumim to purchase Shares in an amount not to exceed the lesser of (i) 15% of the daily trading volume of the Common Stock on the VWAP Purchase Exercise Date (as defined in the Purchase Agreement), or (ii) the quotient (rounded to the nearest whole number) obtained by dividing (x) $1,000,000 by (y) the VWAP on the VWAP Purchase Exercise Date (in each case to be appropriately adjusted for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction during the applicable period).
In the second quarter of 2026, the Company delivered a VWAP Purchase Notice for 129,000 shares which resulted in proceeds of $69 thousand. As of June 30, 2026, a total of $49.9 million remains available under the Purchase Agreement.
As consideration for the Tumim’s commitment to purchase shares of Common Stock, the Company issued a pre-funded warrant to purchase 437,012 shares of Common Stock (the "Pre-Funded Warrants”), to the Tumim as a commitment fee (the "Commitment Fee”). In the second quarter of 2026, Tumim exercised the warrants in full.
On February 11, 2025, we entered into the License Agreement with Statera, whereby we acquired (i) an exclusive worldwide license to the proprietary TLR5 agonist program of Statera known as Entolimod (the "Licensed Molecules”) as it relates to the ARS indication (the "Initial Indication”) and (ii) an exclusive option (the "Exclusive Option”) to acquire the exclusive worldwide license to additional indications, including Lymphocyte Exhaustion, Immunosenescence, Neutropenia and/or Vaccine Adjuvant (the "Subsequent Indications”) and to the TLR5 agonist program of Statera known as Entolasta, in each case as described in more detail below. The License Agreement transaction was consummated concurrently therewith on February 11, 2025 (the "Closing Date”). On February 11, 2025, in connection with, and as consideration for the License Agreement, the Company also entered into a Securities Purchase Agreement with Statera, pursuant to which the Company issued and sold to Statera an aggregate of (i) 55,635 shares of Company common stock and (ii) approximately 360 shares of Series A Preferred Stock for an aggregate price of approximately $1.2 million.
In the first quarter of 2026, the Company validated the current inventory of materials for distribution and sales. As a result, the Company capitalized $750 thousand of inventory costs and recorded a liability of $750 thousand which is included in accrued expenses on the balance sheet as of MarchJune 31,30, 2026. TheIn July, 2026, the Company hasissued discretionan aggregate of 1,288 shares of Series A Convertible Preferred Stock to payAvenue and Statera in partial settlement of the milestone payment in the form of cash or stock.obligation.
Series A Issuances
On July 31, 2026, the Company issued an aggregate of 1,287.8685 shares of Series A Preferred Stock, as consideration for the Milestone Payment in the amount of $750,000, relating to the validation of current inventory of materials for distribution and sales, to Statera Biopharma, Inc. (“Statera”) and Avenue Venture Opportunities Fund, L.P. (“Avenue”).
On July 31, 2026, in connection with the milestone payment, the Company entered into a securities purchase agreement with Avenue, pursuant to which the Company issued certain shares of Series A Preferred Stock as partial consideration for the milestone payment.
The securities purchase agreement provides certain registration rights related to the securities subject thereto. Specifically, the Company is required to prepare and file a resale registration statement with the SEC within 60 calendar days following the closing date, with respect to the resale of all of the shares of common stock of the Company underlying the Series A Preferred Stock issued thereunder.
Neither the shares of Series A Preferred Stock or the shares of common stock issuable upon conversion of the Series A Preferred Stock, are currently registered under the Securities Act of 1933, as amended (the “Securities Act”) and none of such shares may be offered or sold in the United States absent registration or an exemption from registration under the Securities Act and any applicable state securities laws. The shares of Series A Preferred Stock are subject to certain limitations of conversion, as further described in the Certificate of Designation of Series A Non-Voting Convertible Preferred Stock, including that a holder of Series A Preferred Stock is prohibited from converting shares of Series A Preferred Stock into shares of common stock if, as a result of such conversion, such holder, together with its affiliates, would beneficially own more than a specified percentage (to be established by the holder between 4.9% and 19.9%) of the total number of shares of common stock issued and outstanding immediately after giving effect to such conversion.
The Company intends to continue actively monitoring the closing bid price for the Company’s common stock between now and September 15, 2026, and will consider available options to resolve the deficiency and regain compliance with the Minimum Bid Price Requirement.Requirement, including by effecting a reverse stock split, a proposal for which will be voted upon by the Company’s shareholders at its Special Meeting of Shareholders to be held on August 14, 2026. If the Company does not regain compliance within the allotted compliance period, including any extensions that may be granted by Nasdaq, Nasdaq will provide notice that the Company’s common stock will be subject to delisting. The Company would then be entitled to appeal that determination to a Nasdaq hearings panel. There can be no assurance that the Company will be successful is effecting a reverse stock split, regain compliance with the Minimum Bid Price Requirement during the 180-day compliance period, secure a second period of 180 days to regain compliance, or maintain compliance with the other Nasdaq listing requirements.
First QuarterHalf of 2026 and subsequent periods
In the first quarterhalf of 2026, we continued to develop our TLR5 program and invested in our CDMO operations in San Antonio, TX. Other updates include:
We have expanded our headcount to support our growth and reduce reliance on third-party service providers in areas where the benefits outweigh the costs. We have relied, and continue to rely, heavily on third-party service providers, including software-as-a-service platforms, clinical research organizations, finance and accounting support, and legal support to carry out our operations.
Comparison of the Three and Six Months Ended MarchJune 31,30, 2026 and 2025
Operating Expenses
For the three months ended MarchJune 31,30, 2026, research and development expenses increased by $1.5$2.0 million compared to the same period in 2025. TheFor increasethe wassix months ended June 30, 2026, research and development expenses increased by $3.6 million compared to the same period in 2025The increases were primarily due to the addition of our CDMO operations, which increased expenses for the firstsecond quarter by $1.0$1.2 million.million, Additionaland increasesby $2.2 million for the year-to-date period. Increased expenses during the second quarter of $0.32026 included $0.6 million related to headcountthe exclusive commercial development and license agreement with Larmor Bio and $0.2 million related to consultingresearch expensessurrounding asan weoral focusedformulation ourfor effortsEntolimod. onOther manufacturingincreases related to headcount changes and consultants used for the validation of Entolimod.
Selling, general and administrative expenses increased to $3.8$3.7 million for the three months ended MarchJune 31,30, 2026, compared to $1.0 million for the three months ended MarchJune 31,30, 2025. The increase was primarily due to the addition of our CDMO operations, which increased expenses for the firstsecond quarter by $1.7$2.3 million. The CDMO expenses arefor comprisedthe ofsecond $1.1quarter include $1.2 million of facility costs and equipment rentals, headcount related expenses of $0.3$0.4 millionmillion, andproperty tax accruals of $0.2 million, professional fees of $0.2$0.1 million and depreciation expense of $0.4 million. Additional increased expenses were primarily $0.4 million of severance costs, $0.3 million of increased headcountincreases related expensesto legal and $0.2 million of increased professional fees.fees, including accounting and investor relations.
For the six months ended June 30, 2026, selling, general and administrative expenses increased to $7.5 million compared to $2.1 million for the same period in 2025. The increase was primarily due to the addition of our CDMO operations, which increased expenses for the first half of the year by $4.0 million. The CDMO expenses for the first half of the year include $2.2 million of facility costs and equipment rentals, headcount related expenses of $0.8 million, property tax accruals of $0.2 million, professional fees of $0.4 million and depreciation expense of $0.4 million. Additional increases related to legal and professional fees, including accounting and investor relations. During the first quarter of 2026, we recorded $0.4 million of severance costs related to the departure of our CEO in March 2026.
Other (expense) income, net, increased by $0.6 million and $1.2 million for the three and six months ended MarchJune 31,30, 2026, respectively compared to the same periodperiods in 2025. The increaseincreases waswere primarily related to interest expense and amortization of the debt discount and issuance costs associated with the senior convertible note payable. The note was not outstanding during the three or six months ended June 30, 2025.
Net Income (Loss) From Discontinued Operations
From Discontinued Operations
Net income (loss) from discontinued operations represents income and expenses related to the consumer device market which we exited in 2025. During the threesix months ended MarchJune 31,30, 2026 while winding down operations, we continued to sellcomplete ClearUPwind throughdown of our website.ClearUp operations. The incomenet reportedloss forduring the first quarterhalf of 2026 represents revenue fromrepresent the salenet ofcosts product.associated Saleswith throughwind ourdown website stopped as of February 28, 2026.operations.
Since our formation in September 2016 and until early 2025, we have devoted substantially all of our efforts to research and development, to regulatory clearance and to early market development and testing for our first product, released September 2019 in the United States. Since early 2025, we have focused our efforts on entry into biologic therapeutics with our TLR5 program and the development of our lead product candidate, Entolimod. Since December 2025 we have also focused on operating the CDMO business we began after acquiring certain assets from Scorpius. We are not profitable and have incurred net losses and negative cash flows from our operations in each year since our inception. As of MarchJune 31,30, 2026, we had cash and cash equivalents of $7.2$2.1 million, working capital of $5.3$336 millionthousand and an accumulated deficit of $59.0$66.5 million.
On February 6, 2026, we entered into a Common Stock Purchase Agreement with Tumim Stone Capital, LLC (the "Common Stock Purchase Agreement") whereby we have the right, but not the obligation to sell to the investor the lesser of: (a) $50,000,000 of newly issued shares of the Company’s common stock, par value $0.0001 per share (the "Common Stock”),and (b) the Exchange Cap (as defined below), from time to time, at the Company’s sole discretion (each such sale, a "VWAP Purchase”) by delivering an irrevocable written notice to the Investor (each such notice, a "VWAP Purchase Notice”). The Company shall be permitted to deliver a VWAP Purchase Notice to Investor during the period commencing on the Commencement Date (as defined in the Purchase Agreement)and the date that is the first day of the month following the 24-month anniversary of the date on which the initial Registration Statement (as defined below) has been declared effective by the SEC, subject to the terms and conditions set forth therein, and unless the Purchase Agreement is earlier terminated in accordance with its terms. As of June 30, 2026, we have a total of $49.9 million remaining available under the Common Stock Purchase Agreement.
Although we continuously monitor operating expenses, we expect that our operating expenses may increase significantly as we discover, acquire, validate and develop our current product candidates and new product candidates; seek regulatory approval and, if approved, proceed to commercialization of new products, including near-term investments in validation of our biologic manufacturing process, preparation of regulatory submissions to domestic and international bodies, and further activities supporting sales and commercialization of Entolimod and, in the future, Entolasta; obtain, maintain, protect and enforce our intellectual property portfolio; and hire additional personnel. Our expenses have increased as a result of the asset acquisition that took place in December 2025 and our entry into the CDMO market. We will incur significant costs associated with the CDMO business until and unless such time as we can attract customers and derive revenues to offset such expenses. Furthermore, we have incurred and will continue to incur additional costs associated with operating as a public company. Management expects to incur substantial additional operating losses for the foreseeable future to conduct pre-clinical and clinical trials, complete development or acquisition of new product lines, obtain regulatory approvals, launch and commercialize our products and continue research and development programs. Based on the Company’s current cash levels and burn rate, amongst other things, the Company believes its cash and financial resources may be insufficient to meet the Company’s anticipated needs for the twelve months following the date of issuance of the financial statements for the threesix months ended MarchJune 31,30, 2026, included elsewhere in this Report, which raises substantial doubt about the Company’s ability to continue as a going concern within one year from the issuance date of the financial statements.
We have generated operating losses in each period since inception. We have incurred an accumulated deficit of $59.0$66.5 million through MarchJune 31,30, 2026. We expect to incur additional losses in the future as we expand our research and development activities. Based on our current cash levels and burn rate, amongst other things, we believe our cash and financial resources may be insufficient to meet our anticipated needs for the next twelve months. As a result, we expect that we will need to raise additional capital to continue operating our business and fund our planned operations, including research and development, clinical trials and, if regulatory approval is obtained, commercialization of future product candidates.
Net cash used in operating activities for the threesix months ended MarchJune 31,30, 2026 was $5.0$10.3 million, which consisted primarily of a net loss of $6.2$13.3 million, decreased by non-cash charges of $1.0$2.4 million and a net decrease of $0.2$0.6 million in our net operating assets and liabilities. The non-cash charges primarily consisted of $0.4$0.9 million of amortization of debt discount and debt issuance costs, $0.2$0.3 million of stock-based compensation, $0.2$0.4 million of non-cash interest expenseexpense, and $0.2$0.4 million of amortization of the right-of-use assets associated with our facility leases.leases and $0.4 million of depreciation expense. The change in our net operating assets and liabilities was primarily due to an increase in accounts payable and accrued expenses of $1.5$1.8 million, offset by ana decrease of $0.2 million related to lease liabilities and increases in inventory of $0.8 million and prepaid expenses and other current assets of $0.3$0.2 million.
Net cash used in operating activities for the threesix months ended MarchJune 31,30, 2025 was $0.9$2.7 million, which consisted primarily of a net loss of $1.5$3.4 million, decreased by non-cash charges of $0.1$0.3 million and a net increase of $0.4 million in our net operating assets and liabilities. The non-cash charges primarily consisted of $0.1$0.3 million of stock-based compensation. The change in our net operating assets and liabilities was primarily due to an increase in accounts payable and accrued expenses of $0.5 million and an increase in prepaid expenses and other assets of $0.1 million.
Net cash used in investing activities for the threesix months ended MarchJune 31,30, 2026 was $7$64 thousand for the acquisition of property and equipment. Net cash used in investing activities for the threesix months ended MarchJune 31,30, 2025 was $526$546 thousand, which consisted primarily of $300 thousand of cash paid for the Statera License Agreement and transactions costs of $226$243 thousand.
Cash provided by financing activities during six months ended June 30, 2026 was $187 thousand and consisted of approximately $241 thousand of net proceeds from the closing of the Fifth Tranche of our Securities Purchase Agreement for Series B Preferred Stock and $69 thousand of proceeds from the sale of common stock to Tumim pursuant to our Equity Line of Credit, offset by $120 thousand of offering costs paid in advance of sales of common stock.
Cash provided by financing activities during the six months ended June 30, 2025 was $2.4 million and consisted of approximately $109 thousand from the exercise of Series A warrants, net proceeds of approximately $1.6 million related to the sale of common stock pursuant to our Equity Distribution Agreement with Maxim, the sale of common stock to Mast Hill pursuant to the equity line of credit for net proceeds of $311 thousand and the sale of 700 shares of Series B Preferred Stock and warrants to purchase shares of our common stock, for net proceeds of $585 thousand. Cash provided was offset by $158 thousand of offering costs paid in advance of sales of common stock.
Cash used in financing activities during three months ended March 31, 2026 consisted of $44 thousand of offering costs paid in advance of sales of common stock.
Cash provided by financing activities during the three months ended March 31, 2025, consisted primarily of proceeds from the exercise of 7,524 common warrants with proceeds of $109 thousand.
As discussed elsewhere in this Quarterly Report, theour worldbusiness hasis continuedsubject to berisks, affected byincluding the ongoing conflict between Russia and Ukraine and the more recent conflict among the U.S., Israel, Hamas and Iran, economic uncertainty in human capital management ("HCM”) and certain other macroeconomic factors. The general consensus among economists continues to suggest that we should expect a higher recession risk to continue for the near term. Climate change continues to be an intense topic of public discussion and isgeopolitical adding additional challenges and financial burden due to impending preparations and changes in the customer mindset.factors. These factors, amongst other things, could result in further economic uncertainty and volatility in the capital markets in the near term, and could negatively affect our operations. Effects of the pandemic and recent economic volatility have negatively impacted our business in various ways over the last three years,ways, including as a result of global supply chain constraints at least partially attributable to the pandemic.constraints. We will continue to monitor material impacts on our HCM strategies, including the potential of employee attrition, amongst other things.
Although we currently do not anticipate supply shortages, they will continue to pose a material risk for the Company in the near term,term and, as a matter of business, we evaluate alternative and secondary source suppliers in order to ensure that we are able to source sufficient components and materials to manufacture our products. Global supply chain shortages (especially when coupled with inflation, tariffs, and other economic factors) could result in an increase in the cost of the components and other materials used in our products and product candidates, which could result in a decrease of our gross margins or in us having to increase the price at which we sell our products until supply chain constraints are resolved. Additionally, in the event that the price of our components or other materials increases significantly or we are unable to source sufficient components and materials from our current suppliers, or to develop relationships with additional suppliers, to manufacture enough of our products to satisfy demand, we may have to cease or slow down production and our business operations and financial condition may be materially harmed and we may need to alter our plan of operation.
TheUnder the current administration, the United StatesStates' tariff policy has recentlybecome implementedincreasingly aggressive, leading to the implementation or threatenedthreat to implement tariffs on certain imported goods, including on certain items imported from China, Canada and other countries. In addition, China, Canada and other countries have imposed, or threatened to impose, tariffs on a wide range of American products and placed restrictions on the export of certain items in retaliation for these American tariffs. As a result, there is a concern that the imposition of additional tariffs by the United States could result in the adoption of additionalretaliatory tariffs or exportother restrictions by China, Canada and/or other countries. ThisAlthough the validity of the tariffs has been challenged, and some tariffs struck down by the Supreme Court, this has recently led to significant volatility in the capital markets and increased economic uncertainty. Additionally, any resulting trade war could negatively impact our business. The imposition of tariffs on items imported by us from China, Canada or other countries could increase our costs and could result in lowering our gross margin on products sold.
Additionally, U.S. and global markets are continuing to experience volatility and disruption as a result of geopolitical tensions, including the ongoing military conflicts between Russia and Ukraine and Israel and Hamas. Although the length and impact of the ongoing military conflicts is highly unpredictable, the conflicts in Ukraine and Israel/Palestine could continue to lead to market disruptions, including significant volatility in commodity prices, credit and capital markets, as well as further supply chain interruptions. Additionally, the recent military conflict in Ukraine has led to sanctions and other penalties being levied by the United States, European Union and other countries against Russia. Additional potential sanctions and penalties have also been proposed and/or threatened. Russian military actions and the resulting sanctions could adversely affect the global economy and financial markets and lead to instability and lack of liquidity in capital markets, potentially making it more difficult for us to obtain additional funds.
AlthoughAdditionally, although our business has not been materially impacted by the ongoing military conflict between Russia and Ukraine or the conflict between Hamas and Israel to date, it is impossible to predict the extent to which our operations, including the newly in-licensed TLR5 assets, or those of our suppliers and manufacturers, will be impacted in the short and long term, or the ways in which the conflict may impact our business. The extent and duration of the military action, sanctions and resulting market disruptions are impossible to predict, but could be substantial. We are continuing to monitor the situation in Ukraine and globally and assessing its potential impact on our business.
As a result of these global issues and other macroeconomic factors, it has been difficult to accurately forecast our revenues or financial results, especially given the geopolitical issues, recent change in administration, inflation, changes in the Federal Reserve interest rate and the potential fora recession.results. In addition, while the potential impact and duration of these issues on the economy and our business may be difficult to assess or predict, these world events have resulted in, and may continue to result in, significant disruption of global financial markets, and may reduce our ability to access additional capital, which could negatively affect our liquidity in the future. Our results of operations could be materially below our forecasts as well, which could adversely affect our results of operations, disappoint analysts and investors, or cause our stock price to decline. Furthermore, a decrease in orders in a given period could negatively affect our revenues in future periods.
Although inflation experienced a slight decline in 2025the month of June 2026; it has remained relatively high and future rates are unknown. Inflationary factors, such as increases in the cost of our products, interest rates, overhead costs and transportation costs may adversely affect our operating results. Although we do not believe that inflation has had a material impact on our financial position or results of operations to date, we may experience some effect in the near future (especially if inflation rates continue to rise) due to supply chain constraints, consequences associated with the ongoing geopolitical conflicts between Russia and Ukraine, employee availability and wage increases, trade tariffs imposed on certain products from China and increased component and services pricing.
On February 23, 2026, we entered into a lease for approximately 22,262 square feet of warehouse space in San Antonio, TX to be used to support our subsidiary's business. Initial base rent is approximately $21,069 for the first ten months with escalations annually thereafter. The aggregate base rent over the lease term is approximately $0.8 million.Pursuantmillion. Pursuant to the lease, we are also obliged to pay additional expenses related to our share of operating expenses, taxes and utilities related to the premises.
Lease costs recorded duringFor the three and six months ended MarchJune 31,30, 2026 total lease costs were $0.4$0.5 million.million and $0.9 million, respectively. There were no lease costs recorded for the three and six months ended MarchJune 31,30, 2025 as there were no leases in effect at that time. Short-term rental costs for the three months ended MarchJune 31,30, 2026 and 2025 were $94$10 thousand and $4$11 thousand, respectively. Short-term rental costs for the six months ended June 30, 2026 and 2025 were $104 thousand and $15 thousand, respectively.
Shear Kershman
In April 2026, the Company entered into a Product Development Agreement and Option to License Product and Intellectual Property (the "SKL Agreement") with Shear Kershman Labs, a Missouri corporation ("SKL"), pursuant to which the Company engaged SKL to develop a heat-stable oral transmucosal delivery formulation of Entolimod utilizing proprietary formulation systems, with the objective of demonstrating systemic absorption via oral transmucosal delivery. Under the SKL Agreement, the Company has an option, subject to an option period and other specified terms and conditions, to license the products and intellectual property developed under the agreement. In connection with the SKL Agreement, the Company is obligated to pay SKL a fixed fee of $0.5 million upon project commencement and may be required to make additional payments of up to $7.2 million upon the achievement of specified development and regulatory milestones. The Company may also be obligated to pay up to an additional $12.5 million in sales-based milestone payments, as well as royalties on net sales of commercialized licensed products. As of June 30, 2026, the Company had recorded a liability of $0.2 million related to the SKL Agreement, which is included in accounts payable in the accompanying condensed consolidated balance sheets.
LarmorBio
In April 2026, Velocity Bioworks, Inc., the Company's wholly-owned subsidiary, entered into a Purchase, Collaboration, and Strategic Partnership Agreement (the "Larmor Agreement") with LarmorBio, Inc., a Delaware corporation ("Larmor"), pursuant to which Velocity engaged Larmor to design, develop, and install a prototype real-time cell monitoring and analytics system tailored to Velocity's bioreactor specifications. Under the terms of the Larmor Agreement, Velocity has exclusive use of the system and associated technology within the CDMO sector for a specified period of time. Velocity was also granted a non-exclusive license to all future iterations and next-generation updates of the technology developed by Larmor during the term of the agreement. In addition, the Company was granted observer representation on Larmor's board of directors, as well as a right to invest in Larmor's equity, the terms of which remain subject to negotiation of a separate definitive agreement. Under the Larmor Agreement, Velocity has potential developmental and investment achievement milestone payment obligations of up to $1.4 million. As of June 30, 2026, the Company had recorded a liability of $0.6 million related to the Larmor Agreement, which is included in accounts payable and accrued expenses in the accompanying condensed consolidated balance sheets.
Other
We enter into contracts in the normal course of business with our contract manufacturer and other vendors to assist in the manufacturing of our products and performance of our research and development activities and other services for operating purposes. These contracts generally provide for termination for convenience after expiration of an advance notice period ranging from0from to 600-to-60 days and therefore are cancelable contracts and not included in the table of contractual obligations and commitments.
VBIO insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 1 Form 4 filing (1 insider, 1 trade date, 10,000 shares, about $10.4K) and open-market sales in 0 filings. Net open-market shares: 10,000 (purchases minus sales); net value about $10.4K.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-09-18 | Wolf Lisa G |
Option exercise | 4 | — | — |
| 2026-09-18 | Wolf Lisa G |
Shares withheld for tax | 2 | $2.12 | $4 |
| 2026-06-18 | Wolf Lisa G |
Option exercise | 92 | — | — |
| 2026-05-18 | Handley Michael K |
Option exercise | 2,206 | — | — |
| 2026-04-15 | Bolton Sheryle |
Open-market purchase | 10,000 | $1.04 | $10.4K |
Well-known investors holding VBIO (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 74,145 | $38.5K | 0.0% | New position |