Valion Bio, Inc.

Our Board evaluated the dilution potentially caused by the Plan Amendment in connection with its approval of the Plan Amendment and believes the potential dilutive impact of the increase in the number of shares of Common Stock proposed to be added to the 2021 Plan pursuant to the Plan Amendment is reasonable in light of the objectives and other considerations summarized above.

The table below shows the potential dilution resulting from the Plan Amendment based on the number of shares of our Common Stock outstanding as of May 14, 2025 and the number of shares of our Common Stock that would be outstanding on a pro-forma partially-diluted basis as of May 14, 2025, calculated based on the formula and assumptions described in footnote (2) to the below table. We believe it is appropriate to measure dilution relative to our pro-forma partially-diluted capitalization given the number of shares of Common Stock potentially issuable upon conversion of the outstanding shares of Series A Preferred and the shares of Series B Preferred that may be sold and issued to the Series B Preferred Investor pursuant to the Preferred Offering, as we believe such issuances and conversions are probable.

We believe that the number of shares of Common Stock proposed to be added to the 2021 Plan by the Plan Amendment represents a reasonable amount of potential equity dilution and will allow us to continue granting equity awards, while also pursuing our objectives to (i) create a culture of ownership among our employee and director base, (ii) align the interests of our employees and stockholders, (iii) attract and retain top talent, and (iv) reduce the amount of cash used in our compensation programs in order to build the amount of cash we have available to operate and grow our business.