Rallybio Corp

Previous wording

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

Current wording

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

Previous wording

As of June 30, 2026, we had cash and cash equivalents of $92.8 million. We believe that our existing cash and cash equivalents will be sufficient to fund our operating expenses and capital expenditure requirements for at least 12 months beyond the filing of this Quarterly Report on Form 10-Q, although we anticipate that the Merger will close prior to the end of 2026. See “—Liquidity and Capital Resources.”

Current wording

As of September 30, 2026, we had cash and cash equivalents of $90.7 million. We believe that our existing cash and cash equivalents will be sufficient to fund our operating expenses and capital expenditure requirements for at least 12 months beyond the filing of this Quarterly Report on Form 10-Q, although we anticipate that the Merger will close prior to the end of 2026. See “—Liquidity and Capital Resources.”

Previous wording

We have incurred significant operating losses since inception, including operating losses of $5.7 million and $10.1 million for the three months ended June 30, 2026 and 2025, respectively and $14.4 million and $19.7 million for the six months ended June 30, 2026 and 2025, respectively. The increase in total other income of $50.0 million was a result of the termination of the Candid Merger Agreement on May 4, 2026 and payment of the related termination fee. As of June 30, 2026, we had an accumulated deficit of $266.6 million. These losses have resulted primarily from costs incurred in connection with research and development activities and general and administrative costs associated with our operations. We have not commercialized any products and have never generated revenue from the commercialization of any product. There can be no assurances, however, that additional funding will be available on terms acceptable to us, or at all.

Current wording

We have incurred significant operating losses since inception, including operating losses of $3.4 million and $6.9 million for the three months ended September 30, 2026 and 2025, respectively and $17.8 million and $26.7 million for the nine months ended September 30, 2026 and 2025, respectively. The increase in total other income of $27.5 million was a result of the termination of the Candid Merger Agreement on May 4, 2026 and payment of the related termination fee, offset by other income from the gain on sale of the JV in July 2025. As of September 30, 2026, we had an accumulated deficit of $269.3 million. These losses have resulted primarily from costs incurred in connection with research and development activities and general and administrative costs associated with our operations. We have not commercialized any products and have never generated revenue from the commercialization of any product. There can be no assurances, however, that additional funding will be available on terms acceptable to us, or at all.

Previous wording

We recognize the pro-rata share of losses in the joint venture with Recursion (as successor in interest to Exscientia) on the condensed consolidated statements of operations and comprehensive income (loss) within the loss on investment in joint venture line item, with a corresponding change to the joint venture investment asset on the condensed consolidated balance sheets for equity method investments for which we do not have a controlling interest in. In July 2025, we sold our interest in REV102 to Recursion.

Current wording

We recognize the pro-rata share of losses in the joint venture with Recursion (as successor in interest to Exscientia) on the condensed consolidated statements of operations and comprehensive (loss) income within the loss on investment in joint venture line item, with a corresponding change to the joint venture investment asset on the condensed consolidated balance sheets for equity method investments for which we do not have a controlling interest in. In July 2025, we sold our interest in REV102 to Recursion.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

There was no collaboration and license revenue for the three months ended September 30, 2026. Collaboration and license revenue was $0.2 million for the three months ended September 30, 2025.

Previous wording

▪a $1.4 million decrease in RLYB212 development costs, primarily related to a decrease in clinical costs and other related development costs as a result of our discontinuation of the FNAIT program in April 2025;

Current wording

▪a $1.1 million decrease in RLYB212 development costs, primarily related to a decrease in clinical costs and other related development costs as a result of our discontinuation of the FNAIT program in April 2025;

Previous wording

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

Current wording

▪a $0.8 million decrease in RLYB116 development costs, primarily related to a decrease in clinical costs and other related development costs; and

Previous wording

▪a $2.3 million increase primarily related to legal fees, professional fees and other related general and administrative expenses, the vast majority of which were incurred in connection with the Merger.

Current wording

▪a $0.3 million increase primarily related to legal fees, professional fees and other related general and administrative expenses, the vast majority of which were incurred in connection with the Merger.

Previous wording

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

Current wording

Total other income, net, for the three months ended September 30, 2026 was $0.8 million compared to $22.9 million for the three months ended September 30, 2025. The decrease in total other income of $22.2 million was primarily due to the JV Sale in July 2025.

Previous wording

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

Current wording

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

Previous wording

Loss on investment in joint venture was $0.3 million for the three months ended June 30, 2025. In July 2025, we sold our interest in REV102 to Recursion which resulted in no loss on investment in joint venture for the three months ended June 30, 2026.

Current wording

In July 2025, we sold our interest in REV102 to Recursion which resulted in no loss on investment in joint venture for the three months ended September 30, 2026 and 2025.

Previous wording

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

Current wording

Collaboration and license revenue was $0.2 million and $0.6 million for the nine months ended September 30, 2026 and 2025, respectively.

Previous wording

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

Current wording

▪a $4.9 million decrease in RLYB212 development costs, primarily related to a decrease in clinical costs and manufacturing costs and other related development costs as a result of our discontinuation of the FNAIT program in April 2025;

Previous wording

▪a $0.7 million decrease in RLYB116 development costs, primarily related to a decrease in clinical and manufacturing costs and other related development costs; and

Current wording

▪a $1.8 million decrease in RLYB116 development costs, primarily related to a decrease in clinical costs and manufacturing costs and other related development costs; and

Previous wording

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

Current wording

▪a $5.3 million increase primarily related to legal fees, professional fees and other related general and administrative expenses, the vast majority of which were incurred in connection with the Merger and the Candid Merger.

Previous wording

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

Current wording

▪a $2.8 million decrease in personnel expenses, primarily related to lower ongoing headcount during the nine months ended September 30, 2026 as compared to the same period in 2025. In addition, there was a decrease in share-based compensation and a decrease in the bonus accrual in 2026 that was offset by an increase in severance recognized in connection with the Merger and the Candid Merger.

Previous wording

Total other income, net, for the three months ended June 30, 2026 was $50.6 million compared to $0.6 million for the three months ended June 30, 2025. The increase in total other income of $50.0 million was primarily a result of the termination of the Candid Merger Agreement, which resulted in a termination fee of $50.0 million paid to us on May 4, 2026.

Current wording

Total other income, net, for the nine months ended September 30, 2026 was $51.9 million compared to $24.4 million for the nine months ended September 30, 2025. The increase in total other income of $27.5 million was primarily a result of the termination of the Candid Merger Agreement, which resulted in a termination fee of $50.0 million paid to us on May 4, 2026, offset by other income of $22.4 million due to the gain on sale of the JV in July 2025.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

As of June 30, 2026, we had $92.8 million of cash and cash equivalents.

Current wording

As of September 30, 2026, we had $90.7 million of cash and cash equivalents.

Previous wording

Because of the numerous risks and uncertainties, length of time and scope of activities associated with research, development and commercialization of pharmaceutical product candidates, we are unable to estimate the actual amount of funds we will require for development, approval and any approved marketing and commercialization activities.

Current wording

If we continue to progress the development of our product candidates and because of the numerous risks and uncertainties, length of time and scope of activities associated with research, development and commercialization of pharmaceutical product candidates, we are unable to estimate the actual amount of funds we will require for development, approval and any approved marketing and commercialization activities.

Previous wording

During the six months ended June 30, 2026, net cash provided by operating activities was $37.9 million as compared to $18.6 million net cash used during the six months ended June 30, 2025. The increase in net cash provided by operating activities during the six months ended June 30, 2026 as compared to net cash used during the six months ended June 30, 2025 was primarily a result from the termination of the Candid Merger Agreement, in addition to a decrease in research and development activities; offset by an increase in general and administration activities.

Current wording

During the nine months ended September 30, 2026, net cash provided by operating activities was $35.7 million as compared to $25.1 million of net cash used during the nine months ended September 30, 2025. The increase in net cash provided by operating activities during the nine months ended September 30, 2026 as compared to net cash used during the nine months ended September 30, 2025 was primarily a result from the termination of the Candid Merger Agreement, which resulted in a termination fee of $50.0 million paid to us in May 2026, in addition to a decrease in research and development activities; offset by an increase in general and administration activities and other income due to the gain on sale of the JV in July 2025.

Previous wording

Net cash provided by investing activities was $23.4 million during the six months ended June 30, 2026 as compared to $14.1 million of net cash provided by investing activities during the six months ended June 30, 2025. The increase of $9.3 million in net cash provided by investing activities was primarily related to proceeds of $23.4 million from maturities of highly-rated debt securities during the six months ended June 30, 2026, as compared to proceeds from maturities of highly-rated debt securities of $25.5 million, partially offset by purchases of highly-rated debt securities of $9.9 million during the six months ended June 30, 2025.

Current wording

Net cash provided by investing activities was $23.4 million during the nine months ended September 30, 2026 as compared to $43.3 million of net cash provided by investing activities during the nine months ended September 30, 2025. The decrease of $19.9 million in net cash provided by investing activities was primarily related to proceeds of $23.4 million from maturities of highly-rated debt securities during the nine months ended September 30, 2026, as compared to proceeds from maturities of highly-rated debt securities of $35.5 million and proceeds of $20.0 million from the sale of common stock received from the sale of the JV during the nine months ended September 30, 2025, partially offset by purchases of highly-rated debt securities of $10.6 million and investment in the JV of $1.5 million during the nine months ended September 30, 2025.

Previous wording

Net cash provided by financing activities during the six months ended June 30, 2026 was $134 thousand primarily representing proceeds from the issuance of common stock from the exercise of stock options and under the stock purchase plan. Net cash provided by financing activities during the six months ended June 30, 2025 was $10 thousand primarily representing the issuance of common stock under the stock purchase plan.

Current wording

Net cash provided by financing activities during the nine months ended September 30, 2026 was $254 thousand primarily representing proceeds from the issuance of common stock from the exercise of stock options and under the stock purchase plan. Net cash provided by financing activities during the nine months ended September 30, 2025 was $10 thousand primarily representing the issuance of common stock under the stock purchase plan.

Previous wording

There have been no other material changes in our contractual obligations and commitments during the six months ended June 30, 2026 from those described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Contractual Obligations” in our Annual Report.

Current wording

There have been no other material changes in our contractual obligations and commitments during the nine months ended September 30, 2026 from those described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Contractual Obligations” in our Annual Report.