Valion Bio, Inc.

On March 9, 2026, VBI entered into a lease (the “Mammalian Building Lease”) with Merchants Ice II, LLC (“Merchants Ice II”) to lease an approximately 20,144 square foot facility located at the Property. The term of the Mammalian Building Lease is 102 months, effective January 1, 2026, unless earlier terminated by the parties pursuant to the terms thereof. In exchange for leasing the premises, VBI shall pay Merchants Ice II a monthly base rent of $55,030 for the first twelve months, or a total of $660,357, with annual increases of approximately 3.0%. The aggregate base rent over the lease term is approximately $6.29 million. The Mammalian Building Lease provides that VBI will pay additional expenses to TPB related to VBI’s share of operating expenses, taxes and utilities related to the premises using ratable percentages set forth in the Mammalian Building Lease.

On March 13, 2026, VBI entered into a sublease (the “Office Sublease” and together with the Microbial Building Lease and the Mammalian Building Lease, the “Facility Leases”) with Texas Research and Technology Foundation (“TRTF”) to sublease approximately 8,122 square feet of office space located at the Property, which Office Sublease was consented to by TPB, as landlord of the leased premises, and is subject to the terms of that certain Office Lease Agreement, dated June 1, 2024, by and between TRTF and TPB. The term of the Office Sublease is 110 months, unless earlier terminated by the parties pursuant to the terms of the Office Sublease. This office will serve as the new principal executive office of the Company. In exchange for subleasing the premises, VBI shall pay TRTF a monthly base rent of $30,436, with annual increases of approximately 3.0%. The aggregate base rent over the lease term is approximately $3.9 million. The Office Sublease provides that VBI will pay additional expenses to TPB related to VBI’s share of operating expenses, taxes and utilities related to the premises using ratable percentages set forth in the Office Sublease.

• 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, 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.
• We are currently operating in a period of economic uncertainty and capital markets disruption, which has been significantly impacted by geopolitical instability and the ongoing military conflicts between Russia and Ukraine and Israel, Hamas and Iran. Our business, financial condition and results of operations could be materially adversely affected by any negative impact on the global economy and capital markets resulting from the conflict in Ukraine and the Middle East and/or geopolitical tensions.
• International trade disputes, including those with China, could result in tariffs and other protectionist measures that could have a material adverse effect on our business, financial condition, results of operations and our ability to raise capital and the market price of our shares.
• Cybersecurity risks and cyber incidents, as well as other significant disruptions of our information technology networks and related systems and resources, could adversely affect our business, disrupt operations and expose us to liabilities to employees, customers, governmental regulators, and other third parties.
• 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.
• We may not be able to successfully identify, consummate or integrate licensed assets or acquisitions or to successfully manage the impacts of such transactions on our operations.
• Our insurance may not adequately cover our operating risk or litigation exposure.
• We may face risks associated with expanding to international markets.
• The size and expected growth of our available market has not been established with precision and may be smaller than we estimate.
• Risks related To Our Contract Development and Manufacturing Organization (CDMO) Subsidiary, Velocity Bioworks
• Our CDMO business model is unproven and subject to significant execution risk.
• We may be unable to integrate the acquired Scorpius assets and retain the personnel necessary to operate Velocity Bioworks.
• Our CDMO operations are subject to extensive regulatory oversight, and failures to comply could result in the suspension or loss of our manufacturing authorizations.
• We are subject to risks related to the handling, use, and disposal of hazardous materials at our San Antonio manufacturing facility.
• Our CDMO operations are subject to concentration risk due to our single-site manufacturing footprint.
• We may face customer concentration risk and uncertainty in CDMO contract structures.
• Our CDMO activities create potential liability exposure from manufacturing errors and product defects.
• Risks Relating to Regulatory Drug Approval
• 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.
• Failure to obtain regulatory approval in international jurisdictions could prevent us from marketing our products abroad.
• The fast track designation for Entolimod may not actually lead to a faster development or regulatory review or approval process.
• We may seek breakthrough therapy designation for some of our product candidates. The designation may not be granted and, even if granted by the FDA, such designation may not lead to a faster development of any product candidate or approval process for any product candidate.
• If the FDA does not conclude that certain of our product candidates satisfy the requirements for the Section 505(b)(2) regulatory approval pathway, or if the requirements for such product candidates under Section 505(b)(2) are not as expected, the approval pathway for those product candidates will likely take significantly longer, cost significantly more and entail significantly greater complications and risks than anticipated, and in either case may not be successful.
• If physicians and patients do not accept and use our drugs, we will not achieve sufficient product revenues, and our business will suffer.
• Risks Related to Legal and Other Regulatory Matters
• 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.
• We are subject to consumer protection laws that regulate our marketing practices and prohibit unfair or deceptive acts or practices. Our actual or perceived failure to comply with such obligations could harm our business, and changes in such regulations or laws could require us to modify our products or marketing or advertising efforts.
• We are subject to U.S. and certain foreign export and import controls, sanctions, embargoes, anti-corruption laws and anti-money laundering laws and regulations.
• 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.
• Tariffs and Trade Restrictions.
• BIOSECURE Act and Evolving Biosecurity Legislation.
• Additional Foreign Supply Chain Risks.
• We expect to become subject to the requirements of the Sunshine Act.
• Risks Related to Our Intellectual Property
• We are highly dependent on our IP, and our methods of protecting our IP may not be adequate or could be costly.
• We may face risks of claims for IP infringement.
• We may be unable to enforce our IP rights throughout the world.
• Risks Related to Our Common Stock
• We expect that our stock price may fluctuate significantly, and investors may not be able to resell their shares at or above the price at which they purchased them.
• Future issuances of stock or other securities could dilute the holdings of stockholders and could materially affect the price of the shares 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 do not expect to pay any cash dividends for the foreseeable future.
• 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.
• 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.
• 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.
• Anti-takeover provisions in our charter documents, and under Delaware law, could make an acquisition of our company more difficult, limit attempts by our stockholders to replace or remove our current management and limit the market price of our common stock.
• Our Certificate of Incorporation and Bylaws provide that the Court of Chancery of the State of Delaware or the federal district court for the District of Delaware will be the exclusive forum for certain disputes between us and our stockholders, which could result in increased costs for our stockholders to bring a claim and could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.
• General Risk Factors
• If securities or industry analysts do not publish research or publish unfavorable or inaccurate research about our business, the market price and trading volume of our common stock could decline.
• We have and will continue to incur significant costs and are subject to heightened regulations and requirements as a result of being a public company, which could lower our profits or make it more difficult to run our business.
• Actual or perceived failures to comply with applicable data privacy and security laws, regulations, policies, standards, contractual obligations and other requirements related to data privacy and security and changes to such laws, regulations, standards, policies and contractual obligations could adversely affect our business, financial condition and results of operations.
• Changes in accounting standards and subjective assumptions, estimates and judgments by management related to complex accounting matters could significantly affect our financial results.
• We may be adversely affected by the effects of inflation.
• We are subject to anti-corruption, anti-bribery, anti-money laundering, and similar laws, and non-compliance with such laws could subject us to criminal or civil liability and harm our business, financial condition, and results of operations.