You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the unaudited condensed consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q for the period ended June 30, 2026 ("Quarterly Report") and our audited financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2025 ("Annual Report"). As used in this Quarterly Report, unless the context otherwise requires, all references to the “Company,” “we,” “us,” “our,” and similar references refer: (1) following the completion of the Merger (as defined below), to Yarrow Bioscience, Inc. (the “Combined Company” or “Yarrow”) and our subsidiaries and (2) prior to the completion of the Merger, to VYNE Therapeutics Inc. (“VYNE”) and its subsidiaries. The disclosure set forth in this section reflects our 1-for-50 reverse stock split, which was effected on July 24, 2026. Accordingly, all share amounts and per share amounts have been adjusted. Company Overview We are a clinical-stage biotechnology company focused on developing transformative therapies to treat autoimmune thyroid diseases. Our lead product candidate, YB-101 (also known as GenSci098), is a humanized, monoclonal antibody targeting the thyroid-stimulating hormone receptor (“TSHR”), which we plan to develop for the treatment of Graves’ disease (“GD”) and thyroid eye disease (“TED”). Both GD and TED are serious and poorly treated autoimmune diseases in which autoantibodies against TSHR attack and overstimulate the receptor, leading to a wide spectrum of thyroidal and extra-thyroidal clinical sequelae. YB-101 was designed to selectively bind to TSHR and block autoantibody-induced receptor activation, thereby directly inhibiting the pathogenic activity of thyroid-stimulating autoantibodies that drive disease progression in GD and TED as well as the biological pathway responsible for hyperthyroidism and orbitopathy. We believe that this novel and targeted approach represents a potential breakthrough for patients with GD and TED and has the potential to address an important unmet need for therapies with differentiated risk-benefit profiles. The Merger The Merger Agreement In August 2025, VYNE’s board of directors (the “Board of Directors”) initiated a strategic review to evaluate a range of options to maximize stockholder value, including the assessment of its internal pipeline, financing opportunities and strategic alternatives. Following the strategic review described above, on December 17, 2025, we entered into the Merger Agreement with Yarrow, a privately held biotechnology company advancing YB-101 (also known as GenSci098), a clinical-stage, humanized monoclonal antibody targeting the thyroid-stimulating hormone receptor for the treatment of Graves’ disease and exploring a clinical development plan for thyroid eye disease, pursuant to which Yarrow became a wholly owned subsidiary of VYNE and VYNE operates under the name Yarrow Bioscience, Inc. following the merger (the “Merger”). In connection with the Merger, we filed a registration statement on Form S-4, most recently amended on June 3, 2026 and declared effective on June 15, 2026, and the related definitive proxy statement/prospectus was filed and first mailed to our stockholders on or about June 15, 2026. On July 16, 2026, we held a special meeting of stockholders (the “Special Meeting”), and all of the proposals included in the proxy statement/prospectus were approved by VYNE stockholders, other than the proposal to adjourn the Special Meeting, which was not presented to the VYNE stockholders. On July 27, 2026 (the “Closing Date”), we consummated the acquisition of Yarrow in accordance with the terms of the Merger Agreement. Following the Merger, the current business of Yarrow became our primary business. Yarrow Series A Preferred Stock Financing In connection with the execution of the Merger Agreement, certain institutional and accredited investors (the "Series A Investors", led by an affiliate of RTW Investments) and Yarrow entered into a Series A stock purchase agreement, pursuant to which such persons invested in and purchased an aggregate of 20,242,911 shares of Yarrow Series A preferred stock at a purchase price of $4.94 per share for aggregate gross proceeds to Yarrow of $100.0 million. Yarrow Pre-Closing Financing Concurrently with the execution and delivery of the Merger Agreement, the Series A Investors also entered into a Securities Purchase Agreement with Yarrow (the "Securities Purchase Agreement"), pursuant to which such investors purchased, immediately prior to the Merger, 1,096,125 shares of Yarrow common stock and 13,068,176 Yarrow pre-funded warrants, for gross proceeds of approximately $100.0 million in the Yarrow Pre-Closing Financing. 24 Table of contents The shares of Yarrow common stock and Yarrow pre-funded warrants that were issued in the Yarrow Pre-Closing Financing were or have the right to be, respectively, converted into shares of VYNE common stock in the Merger. The Securities Purchase Agreement contains customary representations and warranties of Yarrow and the purchaser parties thereto. Pre-Closing Special Cash Dividend Further, on July 10, 2026, the Board of Directors declared a special cash dividend of $17.3 million as of a record date of July 22, 2026, with a payment date of July 23, 2026 (the “special cash dividend”). The ex-dividend date of the special cash dividend was determined by Nasdaq to be July 24, 2026. VYNE stockholders of record prior to the ex-dividend date were entitled to receive the special cash dividend, regardless of whether they beneficially owned such shares as of the dividend date. Reverse Stock Split and Recasting of Per-Share Amounts On September 12, 2025, we received a notification from The Nasdaq Stock Market, LLC (“Nasdaq”) that we were not in compliance with the requirement to maintain a minimum closing bid price of $1.00 per share, as set forth in Nasdaq Listing Rule 5550(a)(2), because the closing bid price of our common stock was below $1.00 per share for 30 consecutive business days. We initially had 180 calendar days, or until March 10, 2026, to regain compliance with the minimum bid price requirement. On March 11, 2026, we received a letter (the “Extension Notice”) from Nasdaq notifying us that our request for an extension to regain compliance with the minimum bid price requirement has been granted, and we had an additional 180 calendar days, or until September 7, 2026, to regain compliance with the minimum bid price requirement. On July 16, 2026, the Board of Directors approved, and on July 24, 2026, we effected, a 1-for-50 reverse stock split of our outstanding shares of common stock. The reverse stock split was intended to support the Merger with Yarrow and to facilitate compliance with Nasdaq's initial listing requirements, including the minimum bid price requirement. On August 10, 2026, we received a letter from the Listing Qualifications Department of Nasdaq providing that we had regained compliance with the minimum bid price requirement and the Nasdaq considers this matter closed. No fractional shares were issued in connection with the reverse stock split. In lieu of fractional shares, stockholders who would otherwise have been entitled to receive a fractional share received cash payments. The par value of our common stock remained unchanged as a result of the reverse stock split. Proportionate adjustments were made to the exercise prices and number of shares underlying our outstanding stock options, restricted stock units, warrants and other equity awards, as well as the number of shares available for issuance under our equity incentive plans. Pursuant to the Certificate of Incorporation, we were previously authorized to issue 150,000,000 shares of common stock, par value $0.0001 per share. On July 27, 2026, we amended our Certificate of Incorporation to increase the number of authorized shares of common stock to 300,000,000. Each share of common stock is entitled to one vote. The holders of common stock are also entitled to receive dividends whenever funds are legally available and when and if declared by the Board of Directors, subject to the prior rights of holders of all classes of preferred stock outstanding. Unless otherwise indicated, all share and per share amounts presented in these condensed consolidated financial statements have been retroactively adjusted to reflect the reverse stock split for all periods presented. Business and Macroeconomic Conditions Uncertainty in the global economy presents significant risks to our business. We are subject to continuing risks and uncertainties in connection with the current macroeconomic environment, including inflation, interest rates, financial market volatility and uncertainty, the impact of war or military conflict, including the wars in Ukraine and the Middle East, rising tensions between China and Taiwan and the response thereto, public health pandemics, global trade policy volatility, such as tariffs, and supply chain disruptions. Adverse effects of these large macroeconomic conditions have been prevalent in many of the areas where we, our contract research organizations, suppliers or third-party business partners conduct business and as a result, we have experienced disruptions and may continue to experience more pronounced disruptions in our operations. In addition, financial markets have experienced a period of high volatility due to these macroeconomic factors. The persistence of this volatility may impact our ability to engage in capital market activities and adequately fund our operations. As of the filing date of this Quarterly Report, the extent to which these macroeconomic events and conditions may impact our financial condition, results of operations or liquidity is uncertain. The effect of these macroeconomic events and conditions may not be fully reflected in our results of operations and overall financial performance until future periods. For further discussion of the potential impacts of macroeconomic events on our business, financial condition, and operating results, see the section captioned “Risk Factors” in Part II, Item 1A of this Quarterly Report. 25 Table of contents Development and License Agreements Agreements with Tay Therapeutics Evaluation and Option Agreement In April 2021, we entered into an Evaluation and Option Agreement (the “Option Agreement”) with Tay. For a description of the Option Agreement, see the section titled, “Development and License Agreements—Agreements with Tay Therapeutics—Evaluation and Option Agreement” included in Part I, Item 2 of the Company’s Quarterly Report for the quarterly period ended March 31, 2026 (the “Q1 Form 10-Q”), filed with the Securities and Exchange Commission (“SEC”) on May 15, 2026, which description is incorporated herein by reference. License for Locally Administered Pan-BD BET Inhibitor Program (Repibresib) In August 2021, we exercised our option with respect to the repibresib program and entered into a license agreement (the "Repibresib License Agreement") granting us a worldwide, exclusive license that is sublicensable through multiple tiers to exploit certain of Tay’s pan-BD BET inhibitor compounds in all fields. For a description of the Repibresib License Agreement, see the section titled, “Development and License Agreements—Agreements with Tay Therapeutics—License for Locally Administered Pan-BD BET Inhibitor Program (Repibresib)” included in Part I, Item 2 of the Company’s Q1 Form 10-Q, which description is incorporated herein by reference. License for Selective BET Inhibitor Program (VYN202) On April 28, 2023, we exercised the Oral Option and entered into a license agreement (the “VYN202 License Agreement”) with Tay granting us a worldwide, exclusive license that is sublicensable through multiple tiers to exploit certain of Tay’s Oral BETi Compounds in all fields. For a description of the VYN202 License Agreement, see the section titled, “Development and License Agreements—Agreements with Tay Therapeutics—License for Selective BET Inhibitor Program (VYN202)” included in Part I, Item 2 of the Company’s Q1 Form 10-Q, which description is incorporated herein by reference. GenSci License Agreement On December 15, 2025, Changchun Genescience Pharmaceutical Company, Ltd. (“GenSci”) and Yarrow entered into a license agreement (the “GenSci License Agreement”), pursuant to which Yarrow obtained from GenSci an exclusive, royalty-bearing license to develop, manufacture, and commercialize YB-101 (also known as GenSci098), an antibody targeting the TSHR outside Greater China for all fields of use, including the treatment of GD and TED. For a description of the GenSci License Agreement, see the section titled, “Yarrow’s Business—Yarrow’s License Agreement—GenSci License Agreement” included in our definitive proxy statement/prospectus filed on Form S-4 with the SEC, most recently amended on June 3, 2026, declared effective on June 15, 2026. Components of Operating Results Revenues Historically, the legacy VYNE business generated revenues under development and license agreements, including royalty payments from sales of Finacea foam. We previously licensed the rights to Finacea to LEO Pharma A/S ("LEO Pharma"). Formulation and use patents for Finacea foam currently expire in 2027 and 2029, respectively, but may experience an earlier loss of exclusivity due to generic entry. On June 11, 2026, LEO Pharma notified us of its decision to terminate the Finacea license agreement effective December 31, 2026. As a result, we do not expect to recognize Finacea royalty revenue for periods after December 31, 2026. For both the three months ended June 30, 2026 and 2025, royalty revenues from LEO Pharma in connection with sales of Finacea were $0.1 million. For the six months ended June 30, 2026 and 2025, royalty revenues from LEO Pharma in connection with sales of Finacea were $0.2 million and $0.3 million, respectively. Operating Expenses Research and Development Expenses Research and development expenses from the legacy VYNE business primarily related to the development of repibresib and VYN202. We charge all research and development expenses to operations as they are incurred. 26 Table of contents Our research and development expenses for the three months ended June 30, 2026 and 2025 were $0.8 million and $4.9 million, respectively. Total research and development expenses for the six months ended June 30, 2026 and 2025 were $1.6 million and $11.0 million, respectively. Research and development expenses consist primarily of: •employee-related expenses, including salaries, benefits and related expenses, including stock-based compensation expenses, for research and development personnel; •expenses incurred under agreements with third parties, including contract research organizations, subcontractors, suppliers and consultants that conduct regulatory activities, clinical trials and preclinical studies; •expenses incurred to acquire, develop and manufacture clinical trial materials; •expenses and milestone payments incurred under licensing agreements; •costs associated with the creation, development and protection of intellectual property; and •other costs associated with preclinical and clinical activities and regulatory operations. General and Administrative Expenses Our general and administrative expenses for the three months ended June 30, 2026 and 2025 were $2.4 million and $2.7 million, respectively. Total general and administrative expenses for the six months ended June 30, 2026 and 2025 were $5.5 million and $6.0 million, respectively. Our general and administrative expenses consist principally of: •employee-related expenses, including salaries, benefits and related expenses, including stock-based compensation expenses; •professional fees and consulting expenses related to the Merger; •professional fees for legal, auditing, tax and other consulting expenses; and •facility, insurance, information technology, travel and depreciation expenses. Other Income, Net Other income, net primarily consists of interest earned on our cash, cash equivalents, and marketable securities. Income Taxes and Net Operating Loss Carryforwards We have incurred significant net operating losses (“NOLs”) since our inception. We expect to continue to incur NOLs until such a time when we generate adequate revenues for us to reach profitability. As of December 31, 2025, we had federal and state net operating loss carryforwards of $332.1 million and $94.2 million, respectively, of which $4.1 million will begin to expire in 2037 for federal and $94.2 million will begin to expire in 2040 for state purposes. As of December 31, 2025, we had federal research and development tax credit carryforwards of $7.1 million, which will begin to expire in 2031. We have no state research and development tax credit carryforwards. As of December 31, 2025, we had $227.8 million in federal and state NOLs with no limited period of use. Other than the federal NOLs expected to expire unutilized as noted below, there were no significant updates through June 30, 2026. We have not completed a Section 382 study through June 30, 2026, however, we may have experienced ownership changes in connection with the Merger. 27 Table of contents NOLs and tax credit carryforwards are subject to review and possible adjustment by the Internal Revenue Service and may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant stockholders over a three-year period in excess of 50%, as defined under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended. This could limit the amount of tax attributes that can be utilized annually to offset future taxable income or tax liabilities. The amount of the annual limitation is determined based on the value of our company immediately prior to the ownership change. Subsequent ownership changes may further affect the limitation in future years. State NOLs and tax credit carryforwards may be subject to similar limitations under state laws. We have not completed a Section 382 study through June 30, 2026, however, we may have experienced ownership changes in connection with the Merger. We completed a 382 study through March 31, 2025, and noted that we experienced ownership changes in connection with the 2020 merger between Menlo Therapeutics (our predecessor company) and Foamix Pharmaceuticals Ltd. and with our private placement transaction in November 2023. As a result of the ownership changes, $40.2 million of federal NOLs and $2.1 million of research and development tax credits are expected to expire unutilized. We may experience ownership changes in the future as a result of the subsequent shifts in our stock ownership, some of which may be outside of our control. As a result, even if we earn net taxable income, our ability to use the NOL and tax credit carryforwards may be materially limited, which could harm our future operating results by effectively increasing our future tax obligations. Results of Operations Comparison of the Three Months Ended June 30, 2026 and 2025 Three months ended June 30, Increase/(Decrease) Increase/(Decrease) (in thousands, except %) 2026 2025 $ % Revenues Royalty revenues $ 97 $ 69 $ 28 40.6 % Total revenues 97 69 28 40.6 % Operating expenses: Research and development 788 4,881 (4,093) (83.9) % General and administrative 2,411 2,730 (319) (11.7) % Total operating expenses 3,199 7,611 (4,412) (58.0) % Operating loss (3,102) (7,542) (4,440) (58.9) % Other income, net 203 1,795 (1,592) (88.7) % Loss from continuing operations before income taxes (2,899) (5,747) (2,848) (49.6) % Income tax expense — — — — % Loss from continuing operations (2,899) (5,747) (2,848) (49.6) % Loss from discontinued operations, net of income taxes (108) (8) (100) * Net loss $ (3,007) $ (5,755) $ (2,748) (47.7) % *Percentage not meaningful Revenues Revenues totaled $0.1 million for both the three months ended June 30, 2026 and 2025, consisting of royalty revenue from our royalty agreement with LEO Pharma. 28 Table of contents Research and Development Expenses Our research and development expenses for the three months ended June 30, 2026 were $0.8 million, representing a decrease of $4.1 million, or 83.9%, compared to $4.9 million for the three months ended June 30, 2025. The decrease was primarily driven by a decrease of $2.4 million in expenses for repibresib, a decrease of $1.3 million in expenses for VYN202, and a decrease of $0.4 million for employee related expenses. The $2.4 million decrease in expenses for repibresib was primarily driven by the timing of expenses for the Phase 2b trial in nonsegmental vitiligo, including our decision to terminate the trial following the announcement of topline results in July 2025. The $1.3 million decrease in expenses for VYN202 was primarily driven by decreased clinical expenses following the clinical hold placed on our Phase 1b trial evaluating VYN202 in subjects with moderate-to-severe plaque psoriasis and our decision to terminate the trial in July 2025. The main driver of current expenses is the repeat non-clinical toxicology study of VYN202 in male dogs, and related costs, to potentially maximize strategic optionality for the asset. The study is expected to be completed in the second half of 2026, with a final report expected in the fourth quarter of 2026. General and Administrative Expenses Our general and administrative expenses for the three months ended June 30, 2026 were $2.4 million, representing a decrease of approximately $0.3 million, or 11.7%, compared to $2.7 million for the three months ended June 30, 2025. The decrease was primarily driven by lower employee-related expenses of $0.3 million and decreased non-transaction consulting and professional fees of $0.5 million, partially offset by the increase of consulting and professional fees of $0.5 million related to finance and legal expenses for the Merger. Other Income, Net Other income, net for the three months ended June 30, 2026 was $0.2 million, representing a decrease of approximately $1.6 million, or 88.7% compared to $1.8 million for the three months ended June 30, 2025. The decrease was primarily driven by the recognition of $1.3 million in income in 2025 related to the closure of the United States Internal Revenue Service ("IRS") examination period of our Employee Retention Credit ("ERTC") filings. The remainder is related to a reduction in interest income earned on cash, cash equivalents and marketable securities compared to prior year. Loss from Discontinued Operations, Net of Income Taxes Due to the sale of our legacy commercial business (the "MST Franchise") during the first quarter of 2022, in accordance with Accounting Standards Codification 205, Discontinued Operations ("ASC 205"), we have classified the results of the MST Franchise as discontinued operations in our unaudited condensed consolidated statements of operations and comprehensive loss for all periods presented. See "Note 4 - Discontinued Operations" in the accompanying unaudited condensed consolidated financial statements. 29 Table of contents Comparison of the Six Months Ended June 30, 2026 and 2025 Six Months Ended June 30, Increase/(Decrease) Increase/(Decrease) (in thousands, except %) 2026 2025 $ % Revenues Royalty revenues $ 183 $ 271 $ (88) (32.5) % Total revenues 183 271 (88) (32.5) % Operating expenses: Research and development 1,605 11,004 (9,399) (85.4) % General and administrative 5,496 6,005 (509) (8.5) % Total operating expenses 7,101 17,009 (9,908) (58.3) % Operating loss (6,918) (16,738) (9,820) (58.7) % Other income, net 434 2,388 (1,954) (81.8) % Loss from continuing operations before income taxes (6,484) (14,350) (7,866) (54.8) % Income tax expense — — — — % Loss from continuing operations $ (6,484) $ (14,350) (7,866) (54.8) % Loss from discontinued operations, net of income taxes (108) (16) 92 * Net loss $ (6,592) $ (14,366) $ (7,774) (54.1) % *Percentage not meaningful Revenues Revenues totaled $0.2 million and $0.3 million for the six months ended June 30, 2026 and 2025, respectively, consisting of royalty revenue from our royalty agreement with LEO Pharma. Research and Development Expenses Our research and development expenses for the six months ended June 30, 2026 were $1.6 million, representing a decrease of $9.4 million, or 85.4%, compared to $11.0 million for the six months ended June 30, 2025. The decrease was primarily driven by a decrease of $4.8 million in expenses for repibresib, a decrease of $3.6 million in expenses for VYN202, a decrease of $0.8 million for employee related expenses, and a decrease of $0.2 million for other research and development services. The $4.8 million decrease in expenses for repibresib was primarily driven by the timing of expenses for the Phase 2b trial in nonsegmental vitiligo, including our decision to terminate the trial following the announcement of topline results in July 2025. The $3.6 million decrease in expenses for VYN202 was primarily driven by decreased clinical expenses following the clinical hold placed on our Phase 1b trial evaluating VYN202 in subjects with moderate-to-severe plaque psoriasis and our decision to terminate the trial in July 2025. The main driver of current expenses is the repeat non-clinical toxicology study of VYN202 in male dogs, and related costs, to potentially maximize strategic optionality for the asset. The study is expected to be completed in the second half of 2026, with a final report expected in the fourth quarter of 2026. General and Administrative Expenses Our general and administrative expenses for the six months ended June 30, 2026 were $5.5 million, representing a decrease of approximately $0.5 million, or 8.5%, compared to $6.0 million for the six months ended June 30, 2025. The decrease was primarily driven by lower employee-related expenses of $0.8 million and lower non-transaction consulting and professional fees of $1.2 million. The decrease was partially offset by increased consulting and professional fees of $1.5 million related to finance and legal expenses for the Merger. 30 Table of contents Other Income, Net Other income, net for the six months ended June 30, 2026 was $0.4 million, representing a decrease of approximately $2.0 million, or 81.8% compared to $2.4 million for the six months ended June 30, 2025. The decrease was primarily driven by the recognition of $1.3 million in income in 2025 related to the closure of the IRS examination period of our Employee Retention Credit ("ERTC") filings. The remainder is related to a reduction in interest income earned on cash, cash equivalents and marketable securities compared to prior year. Loss from Discontinued Operations, Net of Income Taxes Due to the sale of the MST Franchise during the first quarter of 2022, in accordance with ASC 205 we have classified the results of the MST Franchise as discontinued operations in our unaudited condensed consolidated statements of operations and comprehensive loss for all periods presented. See "Note 4 - Discontinued Operations" in the accompanying unaudited condensed consolidated financial statements. Liquidity and Capital Resources Sources of Liquidity As of June 30, 2026, we had cash and cash equivalents of $22.9 million and an accumulated deficit of $764.2 million. We had no outstanding debt as of June 30, 2026. For the six months ended June 30, 2026, we incurred a net loss of $6.6 million and used $6.1 million of cash in operations. On December 17, 2025, we entered into the Merger Agreement pursuant to which, among other matters, Merger Sub merged with and into Yarrow, with Yarrow surviving as our wholly owned subsidiary. On July 27, 2026, we completed the Merger. Following the closing of the Merger, the Combined Company expects its existing cash resources to be sufficient to fund operations into 2028. Our sources of funding for the six months ended June 30, 2026 and 2025 are further evaluated in the cash flow section below. Other than our obligations pursuant to the Tay License Agreements and, following the closing of the Merger, the GenSci License Agreement, we have no ongoing material financial commitments that may affect our liquidity over the next five years. Following the closing of the Merger, we are also subject to contingent milestone payment obligations to GenSci under the GenSci License Agreement, as well as royalty obligations on net sales of YB-101 that would become payable only if and when YB-101 receives regulatory approval and is commercialized. See the sections titled “Development and License Agreements—Agreements with Tay Therapeutics” and “Development and License Agreements—GenSci License Agreement” for additional discussion of our financial obligations under these agreements. Future Funding Requirements Prior to the Merger, our primary uses of capital were historically compensation and related expenses, research and development costs to support our product candidate pipeline, legal and other regulatory expenses and general overhead costs. As of June 30, 2026, we suspended and substantially wound down our research and development activities in anticipation of the Merger with Yarrow and our operations were limited. In order to continue the development of any future product candidates, we will require substantial additional capital. Accordingly, we may seek to raise any necessary additional capital through private or public equity or debt financings, loans or other capital sources, which could include collaborations, partnerships or other licensing or other strategic arrangements with third parties. To the extent that we raise additional capital through equity financings or convertible debt securities, the ownership interest of our stockholders will be or could be diluted, and the terms of these securities may include liquidation, voting or other preferences that adversely affect the rights of our common stockholders. Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, including restricting our operations and limiting our ability to incur liens, issue additional debt, pay dividends, repurchase our common stock, make certain investments or engage in merger, consolidation, licensing, or asset sale transactions. If we raise capital through collaborations, partnerships, and other similar arrangements with third parties, we may be required to grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves. We may be unable to raise additional capital from these sources on favorable terms, or at all. 31 Table of contents Our ability to raise additional capital may also be adversely impacted by global economic conditions and disruptions to, and volatility in, the credit and financial markets in the United States and worldwide resulting from bank failures, other general macroeconomic conditions and otherwise. The failure to obtain sufficient capital on acceptable terms when needed could have a material adverse effect on our business, results of operations or financial condition, including requiring us to delay, reduce or curtail our research or product development efforts. We cannot provide assurance that we will ever generate positive cash flow from operating activities. Our present and future funding requirements will depend on a number of factors, including the following: •the benefits of the Merger and our ability to integrate the businesses of VYNE and Yarrow: •the scope, timing, progress, results, and costs of researching and developing YB-101; •the scope, timing, progress, results, and costs of preclinical studies and clinical trials for any other current and future programs; •the time and costs involved in obtaining regulatory approval for our other pipeline product candidates and any delays we may encounter as a result of evolving regulatory requirements or adverse results with respect to any of these product candidates; •terms and timing of any acquisitions, collaborations or other arrangements; •the cost and timing of attracting, hiring, and retaining skilled personnel to support our operations; •the number of potential new products we identify and decide to develop; •the costs involved in filing and prosecuting patent applications and obtaining, maintaining and enforcing patents or defending against claims or infringements raised by third parties, and license royalties or other amounts we may be required to pay to obtain rights to third party intellectual property rights; and •the costs associated with operating as a public company. Our operating plan may change as a result of many factors currently unknown to us, and any such change may affect our funding requirements. We may therefore need to seek additional capital sooner than planned, through public or private equity or debt financings or other sources, such as strategic collaborations or additional license arrangements. Such financings may result in dilution to stockholders, imposition of debt covenants and repayment obligations or other restrictions that may affect our business. For more information as to the risks associated with our future funding needs, see the section captioned “Risk Factors” in this report. Cash Flows The following table summarizes our cash flows for the six months ended June 30, 2026 and 2025: Six Months Ended June 30, (in thousands) 2026 2025 Net cash (used in) / provided by: Operating activities $ (6,073) $ (22,264) Investing activities $ 5,000 $ 24,506 Financing activities $ (29) $ (121) Net Cash Used in Operating Activities During the six months ended June 30, 2026, net cash used in operating activities was $6.1 million and primarily reflected our net loss of $6.6 million adjusted for non-cash stock-based compensation expense of $0.9 million. The remainder of the cash used in operations was driven by changes in operating assets and liabilities. During the six months ended June 30, 2025, net cash used in operating activities was $22.3 million and primarily reflected our net loss of $14.4 million adjusted for non-cash stock-based compensation expense of $1.3 million, partially offset by the amortization of premium on marketable securities of $0.5 million. The remainder of the cash used in operations was driven by the changes in operating assets and liabilities. Net Cash Provided by Investing Activities During the six months ended June 30, 2026, net cash provided by investing activities was $5.0 million and consisted of $5.0 million of proceeds received from the sale and maturity of marketable securities. 32 Table of contents During the six months ended June 30, 2025, net cash provided by investing activities was $24.5 million and consisted of $47.9 million of proceeds received from the sale and maturity of marketable securities, partially offset by $23.3 million paid for the purchase of marketable securities. Net Cash Used In Financing Activities During the six months ended June 30, 2026, net cash used in financing activities was $29.0 thousand and consisted of withholdings related to the exercise of options and issuance of stock for stock-based compensation arrangements. During the six months ended June 30, 2025, net cash used in financing activities was $0.1 million and consisted of withholdings related to the exercise of options and issuance of stock for stock-based compensation arrangements. Critical Accounting Policies, Significant Judgments and Use of Estimates Our unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP"). The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We believe that the accounting policies discussed below are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates. Our critical accounting policies are described in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on February 27, 2026. There have been no material changes to these policies for the six months ended June 30, 2026, except as set forth below. Effective March 31, 2026 and prior to the Merger, research and development accruals were no longer deemed a critical accounting policy for VYNE. However, the research and development accrual is a critical accounting policy for the Combined Company. Off-Balance Sheet Arrangements We are not party to any off-balance sheet arrangements that have, or are reasonably likely to have, a material current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources. Recently Issued and Adopted Accounting Pronouncements See “Newly issued and recently adopted accounting pronouncements (p)” in "Note 2 - Significant Accounting Policies” in the Notes to Unaudited Condensed Consolidated Financial Statements for a discussion of recently adopted accounting pronouncements and accounting pronouncements not yet adopted, and their expected impact on our financial position and results of operations.