Valion Bio, Inc.

Previous report

The wind down of our ClearUP business may adversely impact our business, results of operations, financial performance, and reputation.

Previous report

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 intend to substantially complete prior to the end of the year. In connection with the wind down of the ClearUP business, we incurred approximately $347 thousand in charges during the quarter ended September 30, 2025 and expect to incur additional related expenditures in the range of approximately $20 thousand to $50 thousand through the end of the year. 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.

Previous report

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.

Previous report

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.

Previous report

We rely on third parties to supply and manufacture our product candidates, which could cause supply shortages, and we currently expect to continue to rely on third parties to manufacture and supply our product candidates.

Previous report

We rely on, and currently expect to continue to rely on, third-party providers for the supply and manufacturing of our product candidates, including materials for our licensed biopharmaceutical products. Lead times for materials and our product candidates may vary significantly, and some materials to manufacture our product candidates are provided by a limited number of sources.

Previous report

We encountered disruptions in our supply of various materials and components during 2022 due to the well-documented shortages and constraints in the global supply chain. Additionally, we have recently experienced delays in our clinical development timeline as a result of the financial stress of Scorpius, the contract manufacturer that we engaged to manufacturer Entolimod. Although we are in close communication with Scorpius and certain of its stakeholders to establish stability and are also considering our options with respect to alternative contract manufacturers, there can be no guarantee that Scorpius will be able to continue to manufacture our product candidates or that we will be able to identify and retain an alternative manufacturer to provide the services in a timely fashion or at all. If we are unable to continue to use Scorpius as our contract manufacturer or engage an alternative manufacturer, the supply or manufacture of our product candidates could be stopped, delayed or made less profitable.

Previous report

We are continuously evaluating alternative and secondary manufacturers and source suppliers in order to ensure that we are able to source sufficient materials to manufacture our product candidates. In the event that we are unable source sufficient materials from our current suppliers, unable to obtain sufficient amounts of our product candidates to conduct clinical trials or satisfy orders, or to develop relationships with additional suppliers or manufacturers, to satisfy demand, we may have to cease or slow down production of our product candidates. To the extent our current manufacturers or suppliers, or any manufacturers and suppliers that we engage in the future, are unable to meet our requirements in a timely and cost-effective manner, we may not be able to obtain an adequate supply of materials for our products or product candidates. Any shortage of materials caused by any disruption or unavailability of supply or an increase in the demand for our product candidates, could result delay the clinical trial and regulatory approval process, delay the development and launch of our product candidates, or increase our costs and decrease our revenue. Any such impacts or delays could adversely affect our sales, cash flows and financial condition and our business may be adversely affected. Our efforts to mitigate supply chain weaknesses may not be successful.

Previous report

A prolonged U.S. federal government shutdown could materially and adversely affect our business and operations.

Previous report

Any disruption in the operations of the U.S. government, including as a result of the recent or future temporary or prolonged shutdowns resulting from the failure of Congress to enact appropriations bills or raise the federal debt ceiling, could materially and adversely affect our business, operations and financial condition. Recently, beginning on October 1, 2025, the U.S. federal government shut down and remained shut down through November 12, 2025, during which time certain regulatory agencies, such as the FDA and the SEC, furloughed critical employees and stopped critical activities. Additionally, on October 10, 2025, the U.S. government implemented substantial layoffs and workforce reductions in connection with the federal government shutdown, which resulted in the suspension or delay of various government-funded programs. While we continue to monitor developments, no assurance can be provided as to if or when affected government employees or contractors will be reinstated and that government-funded programs will resume as normal. Furthermore, the recent federal government shutdown has resulted, and may continue for a prolonged period of time to result, in reduced availability of government services, and suspension or delay of activities by key agencies that regulate, fund, or interact with our business, including the SEC, the FDA, the Department of Health and Human Services, and the U.S. Patent and Trademark Office. As a result, the review and approval of our filings, applications, and submissions could be delayed, and we may be unable to access or rely upon certain government data or systems. In particular, it may lead to disruptions and delays in FDA’s review and oversight of our product candidates and impact the FDA’s ability to provide timely feedback on our development program or pending applications.

Previous report

Additionally, a prolonged or future shutdown of the U.S. federal government could materially impact the operations of the SEC. For example, the SEC announced that during the recent U.S. federal government shutdown, it would not review or declare registration statements effective, which resulted in the delays of the effectiveness of the registration statement on Form S-3 that we filed to register the securities issued to Helena and the designees of Craft in connection with the fourth Tranche Closing, which in turn has resulted in delays in the funding of the fifth and sixth Tranche Closings under the Preferred Purchase Agreement. In the event of an extended shutdown, the SEC may operate with limited staff or suspend certain functions altogether, which could delay the review or effectiveness of our filings, including registration statements or other financing-related disclosures. Such delays could adversely affect our ability to access the public markets and obtain necessary capital in order to properly capitalize and continue to fund our operations.

Previous report

Government shutdowns, if prolonged, can significantly impact the ability of government agencies upon which 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. Even the threat of a government shutdown or prolonged budget negotiation uncertainty may adversely affect the broader U.S. economy, investor confidence, and capital markets. Such conditions could negatively impact our access to financing, timing of capital-raising transactions, and the liquidity or trading volume of our securities. Accordingly, the current or future federal government shutdowns, or uncertainty regarding the continuity of government operations, could have a material adverse effect on our business, results of operations, and stock price.

Previous report

Federal budget and debt-ceiling disputes may adversely affect capital markets and our financing activities.

Previous report

Moreover, the uncertainty surrounding government funding debates and debt-ceiling negotiations can negatively affect market conditions, investor sentiment, and the liquidity of small-cap and microcap issuers such as ours. If market volatility or trading disruptions were to occur during the current or future government shutdowns, our ability to execute at-the-market offerings or other financing transactions under our effective shelf registration statement or through private equity offerings could be materially impaired.

Previous report

Accordingly, any federal government shutdown or protracted budget impasse could materially and adversely affect our regulatory compliance, financing options and capabilities, and overall financial condition.