UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ___ TO ___. Commission file number 001-38356 VYNE THERAPEUTICS INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation ...

Exhibit 99.1 VYNE Reports First Quarter 2024 Financial Results and Provides Business Update BRIDGEWATER, N.J., May 9, 2024 -- VYNE Therapeutics Inc. (Nasdaq: VYNE) ("VYNE" or the "Company"), a clinical-stage biopharmaceutical company focused on developing proprietary, innovative and differentiated therapies for the treatment of immuno- inflammatory conditions, today announced financial results as of and for the three months ended March 31, 2024 and provided a business update. "During the first quarter, we m ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K Delaware 45-3757789 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ___ TO ___. Commission Fi ...

Exhibit 99.1 VYNE Reports 2023 Fourth Quarter and Year-End Financial Results and Provides Business Update BRIDGEWATER, N.J., February 29, 2024 -- VYNE Therapeutics Inc. (Nasdaq: VYNE) ("VYNE" or the "Company"), a clinical- stage biopharmaceutical company focused on developing proprietary, innovative and differentiated therapies for the treatment of immuno-inflammatory conditions, today announced financial results for the fourth quarter and year ended December 31, 2023 and provided a business update. "We hav ...

Part I - Financial Information [Item 1. Unaudited Condensed Consolidated Financial Statements](index=5&type=section&id=Item%201.%20Unaudited%20Financial%20Statements) Presents VYNE Therapeutics Inc.'s unaudited condensed consolidated financial statements and detailed explanatory notes [Unaudited Condensed Consolidated Balance Sheets](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) | Metric | September 30, 2023 (in thousands) | December 31, 2022 (in thousands) | | :--------------------------------- | :-------------------------------- | :-------------------------------- | | Cash and cash equivalents | $15,448 | $30,908 | | Total Current Assets | $17,511 | $38,275 | | Total Assets | $19,267 | $40,758 | | Total Current Liabilities | $6,449 | $9,345 | | Total Liabilities | $7,762 | $9,345 | | Total Stockholders' Equity | $11,505 | $31,202 | - The company's cash and cash equivalents decreased by approximately **50%** from **$30.9 million** at December 31, 2022, to **$15.4 million** at September 30, 2023. Total assets decreased by over **50%** from **$40.7 million** to **$19.2 million**, while total liabilities decreased from **$9.3 million** to **$7.7 million**. Stockholders' equity also saw a significant reduction from **$31.2 million** to **$11.5 million**[23](index=23&type=chunk) [Unaudited Condensed Consolidated Statements Of Operations](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20Of%20Operations) | Metric (in thousands) | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :-------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Total revenues | $114 | $167 | $348 | $471 | | Operating expenses | $6,348 | $9,500 | $22,774 | $26,782 | | Operating loss | $(6,234) | $(9,333) | $(22,426) | $(26,311) | | Net loss | $(6,584) | $(9,459) | $(22,264) | $(13,265) | | Loss per share (basic and diluted) | $(2.01) | $(2.94) | $(6.82) | $(4.18) | - For the three months ended September 30, 2023, total revenues decreased by **31.7%** YoY, while operating expenses decreased by **33.2%** YoY, leading to a **33.2%** reduction in operating loss. However, net loss decreased by **30.4%** YoY. For the nine months ended September 30, 2023, total revenues decreased by **26.1%** YoY, operating expenses decreased by **15.0%** YoY, and operating loss decreased by **14.8%** YoY. Net loss significantly increased by **67.8%** YoY, primarily due to a gain on the sale of the MST Franchise in the prior year's discontinued operations[25](index=25&type=chunk)[164](index=164&type=chunk)[169](index=169&type=chunk) [Unaudited Condensed Consolidated Statements Of Changes In Mezzanine Equity and Stockholders' Equity](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20Of%20Changes%20In%20Mezzanine%20Equity%20and%20Stockholders%27%20Equity) | Metric (in thousands) | Balance at Jan 1, 2023 | Net Loss | Stock-based Compensation | Redemption of Preferred Stock | Issuance of Common Stock | Balance at Sep 30, 2023 | | :-------------------- | :--------------------- | :------- | :----------------------- | :---------------------------- | :----------------------- | :---------------------- | | Mezzanine Equity | $211 | — | — | $(211) | — | $0 | | Additional Paid-in Capital | $693,937 | — | $2,595 | — | $156 | $696,653 | | Accumulated Deficit | $(662,735) | $(22,264) | — | $(149) | — | $(685,148) | | Total Stockholders' Equity | $31,202 | $(22,264) | $2,595 | $(149) | $156 | $11,505 | - The company's total stockholders' equity decreased significantly from **$31.2 million** at January 1, 2023, to **$11.5 million** at September 30, 2023, primarily due to a net loss of **$22.3 million** and the redemption of convertible preferred stock. Mezzanine equity was eliminated through redemption during the period[29](index=29&type=chunk) [Unaudited Condensed Consolidated Statements Of Cash Flows](index=10&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20Of%20Cash%20Flows) | Cash Flow Activity (in thousands) | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(20,204) | $(24,389) | | Net cash provided by investing activities | $5,000 | $15,666 | | Net cash (used in) provided by financing activities | $(269) | $1,445 | | Decrease in cash, cash equivalents and restricted cash | $(15,473) | $(7,278) | | Cash, cash equivalents and restricted cash at end of period | $15,502 | $35,577 | - Net cash used in operating activities decreased from **$24.4 million** in 2022 to **$20.2 million** in 2023. Net cash provided by investing activities significantly decreased from **$15.7 million** in 2022 to **$5.0 million** in 2023, primarily due to lower proceeds from the sale of the MST Franchise. Financing activities shifted from providing **$1.4 million** in cash in 2022 to using **$(0.3) million** in 2023, mainly due to the redemption of convertible preferred stock[36](index=36&type=chunk)[179](index=179&type=chunk)[182](index=182&type=chunk)[183](index=183&type=chunk) [Notes to Unaudited Interim Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Unaudited%20Interim%20Condensed%20Consolidated%20Financial%20Statements) [NOTE 1 - Nature of Operations](index=11&type=section&id=NOTE%201%20-%20NATURE%20OF%20OPERATIONS) VYNE Therapeutics is a clinical-stage biopharmaceutical company developing immuno-inflammatory therapies via its BET inhibitor platform - VYNE Therapeutics is a clinical-stage biopharmaceutical company focused on immuno-inflammatory conditions, leveraging its BET inhibitor platform[40](index=40&type=chunk)[41](index=41&type=chunk) - VYN201, a topical pan-BD BET inhibitor for nonsegmental vitiligo, showed significant clinical improvement in F-VASI in Phase 1b (**1%** and **2%** cohorts) after **16 weeks** of treatment, with Phase 2b preparatory activities initiated for H1 2024[42](index=42&type=chunk)[145](index=145&type=chunk)[148](index=148&type=chunk) - VYN202, an oral BD2-selective BET inhibitor, is in preclinical development for immuno-inflammatory indications, with an IND submission expected by year-end 2023 and Phase 1a trial commencement in Q1 2024, followed by Phase 1b trials in psoriasis and rheumatoid arthritis in H2 2024[43](index=43&type=chunk)[146](index=146&type=chunk) - The company completed a **1-for-18** reverse stock split on February 10, 2023, to adjust its outstanding common stock[46](index=46&type=chunk)[119](index=119&type=chunk) [NOTE 2 - Significant Accounting Policies](index=12&type=section&id=NOTE%202%20-%20SIGNIFICANT%20ACCOUNTING%20POLICIES) Outlines significant accounting policies for interim financial statements, covering presentation, revenue recognition, R&D costs, and recent accounting pronouncements - The company's financial statements are prepared in accordance with U.S. GAAP for interim periods, with certain information condensed or omitted compared to annual reports[52](index=52&type=chunk) - Revenue recognition follows ASC Topic 606, with royalty revenues recognized as products are sold by the customer. Following the MST Franchise disposition, the company no longer generates product sales revenue[57](index=57&type=chunk)[58](index=58&type=chunk)[59](index=59&type=chunk) - Research and development costs are expensed as incurred, including clinical trial expenses, salaries, and consulting fees[76](index=76&type=chunk) - The company adopted ASU 2016-13 (Credit Losses) as of January 1, 2023, with no material impact, and is evaluating ASU 2020-04/2022-06 (Reference Rate Reform), not expecting a material impact[90](index=90&type=chunk)[92](index=92&type=chunk) [NOTE 3 - Strategic Agreements](index=19&type=section&id=NOTE%203%20-%20STRATEGIC%20AGREEMENTS) Details strategic agreements, including exclusive worldwide licenses for BET inhibitor compounds (VYN201, VYN202) and the MST Franchise sale - VYNE holds exclusive worldwide rights to Tay Therapeutics' BET inhibitor compounds for immuno-inflammatory conditions, covering both pan-BD (VYN201) and selective (VYN202) inhibitors[94](index=94&type=chunk)[96](index=96&type=chunk) - The VYN201 License Agreement includes potential clinical development and regulatory approval milestones of up to **$15.75 million** and tiered royalty payments up to **10%** of annual net sales[94](index=94&type=chunk) - The VYN202 License Agreement, exercised in April 2023, involves a **$3.75 million** cash payment and potential milestones up to **$43.75 million**, plus tiered royalties up to **10%** of annual net sales[96](index=96&type=chunk)[97](index=97&type=chunk) - The MST Franchise was sold to Journey Medical Corporation in January 2022 for an upfront payment of **$20.0 million** and a **$5.0 million** deferred payment received in January 2023, with eligibility for up to **$450.0 million** in sales milestone payments[98](index=98&type=chunk)[100](index=100&type=chunk) [NOTE 4 – Discontinued Operations](index=20&type=section&id=NOTE%204%20%E2%80%93%20Discontinued%20Operations) Provides financial details of the MST Franchise, classified as discontinued operations after its January 2022 sale, including combined results - The sale of the MST Franchise in January 2022 was classified as discontinued operations due to its strategic shift and major effect on the business[101](index=101&type=chunk) | Metric (in thousands) | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :-------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Product sales, net | $(498) | $0 | $(498) | $106 | | (Loss) income from discontinued operations | $(513) | $(117) | $(544) | $1 | | Gain on the sale of the MST Franchise | $0 | $(87) | $0 | $12,918 | | Net (loss) income from discontinued operations | $(513) | $(204) | $(544) | $12,919 | - The company recognized a gain of **$12.9 million** on the sale of the MST Franchise for the nine months ended September 30, 2022, which significantly impacted the net income from discontinued operations in that period[103](index=103&type=chunk)[105](index=105&type=chunk) [NOTE 5 – Mezzanine Equity and Stockholder Capital](index=22&type=section&id=NOTE%205%20%E2%80%93%20MEZZANINE%20EQUITY%20AND%20STOCKHOLDER%20CAPITAL) Details preferred and common stock activities, including Series A Preferred Stock redemption, a reverse stock split, common stock issuances, and a November 2023 private placement - The company redeemed all outstanding Series A Convertible Preferred Stock on January 17, 2023, for **$360 thousand**, eliminating mezzanine equity[116](index=116&type=chunk)[117](index=117&type=chunk) - A **1-for-18** reverse stock split was effected on February 10, 2023, impacting common stock and per-share amounts retroactively[119](index=119&type=chunk)[120](index=120&type=chunk) - In the nine months ended September 30, 2023, the company issued **34,589** shares of common stock through an at-the-market offering for **$0.2 million** in net proceeds[121](index=121&type=chunk) - On November 1, 2023, the company completed a private placement of common stock and pre-funded warrants, generating **$88.2 million** in gross proceeds[123](index=123&type=chunk)[138](index=138&type=chunk) [NOTE 6 – Stock-Based Compensation](index=24&type=section&id=NOTE%206%20%E2%80%93%20STOCK-BASED%20COMPENSATION) Outlines equity incentive plans and ESPP, detailing shares and stock-based compensation expenses across R&D and SG&A categories | Expense Category (in thousands) | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :------------------------------ | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Research and development | $207 | $355 | $399 | $977 | | Selling, general and administrative | $656 | $819 | $2,196 | $2,605 | | Total Stock-based Compensation | $863 | $1,174 | $2,595 | $3,230 | - Total stock-based compensation expenses decreased by **26.5%** for the three months ended September 30, 2023, and by **19.6%** for the nine months ended September 30, 2023, compared to the respective prior periods[130](index=130&type=chunk) [NOTE 7 – Operating Leases](index=25&type=section&id=NOTE%207%20%E2%80%93%20OPERATING%20LEASES) Describes operating lease agreements, including the transition to a smaller corporate headquarters and a new Master Lease - The company transitioned to a smaller corporate headquarters in November 2022 and signed a Master Lease for approximately **5,755 square feet** of office space in Bridgewater, New Jersey, through September 30, 2025[134](index=134&type=chunk) - The Master Lease is expected to result in total lease payments of approximately **$0.3 million**[134](index=134&type=chunk) [NOTE 8 – Commitments and Contingencies](index=25&type=section&id=NOTE%208%20%E2%80%93%20COMMITMENTS%20AND%20CONTINGENCIES) As of September 30, 2023, no pending legal proceedings or claims are likely to have a material adverse effect on the company - As of September 30, 2023, there are no pending legal proceedings or claims against the company that are likely to have a material adverse effect[136](index=136&type=chunk) [NOTE 9 – Subsequent Events](index=25&type=section&id=NOTE%209%20%E2%80%93%20SUBSEQUENT%20EVENTS) Details a significant subsequent event: a November 1, 2023, private placement generating **$88.2 million** in gross proceeds from common stock and pre-funded warrants - On November 1, 2023, the company completed a private placement, raising **$88.2 million** in gross proceeds from the sale of **10,652,543** shares of common stock and **28,614,437** pre-funded warrants[138](index=138&type=chunk) - The pre-funded warrants have an exercise price of **$0.0001** per share and do not expire until exercised in full, subject to beneficial ownership limitations[139](index=139&type=chunk) - A Registration Rights Agreement was entered into, requiring the company to register the resale of the common stock and underlying warrant shares with the SEC[140](index=140&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial condition and results, highlighting the strategic shift to a clinical-stage biopharmaceutical company, key program developments, and liquidity [Company Overview](index=27&type=section&id=Company%20Overview) VYNE Therapeutics is a clinical-stage biopharmaceutical company developing innovative immuno-inflammatory therapies, with VYN201 and VYN202 as lead programs - VYNE Therapeutics is a clinical-stage biopharmaceutical company focused on developing proprietary therapies for immuno-inflammatory conditions[143](index=143&type=chunk) - The company holds exclusive worldwide rights to BET inhibitors from Tay Therapeutics, with initial focus on immuno-inflammatory diseases[144](index=144&type=chunk) - VYN201, a topical pan-BD BET inhibitor, demonstrated significant clinical improvement in facial vitiligo (F-VASI) in Phase 1b, with Phase 2b expected in H1 2024[145](index=145&type=chunk) - VYN202, an oral BD2-selective BET inhibitor, is in preclinical development, with an IND submission planned by year-end 2023 and Phase 1a trial initiation in Q1 2024[146](index=146&type=chunk) [Key Developments](index=27&type=section&id=Key%20Developments) Key developments include positive Phase 1b data for VYN201, positive preclinical data for VYN202, and an **$88.2 million** private placement - Positive Phase 1b data for topical VYN201 in nonsegmental vitiligo showed a statistically significant dose-dependent reduction in F-VASI score, with mean percentage reductions of **30.2%** (**1.0%** cohort) and **39.0%** (**2.0%** cohort) after **16 weeks**[148](index=148&type=chunk) - Positive preclinical data for oral VYN202 in psoriasis and rheumatoid arthritis models demonstrated significant inhibition of inflammatory biomarkers and resolution of disease signs/symptoms[156](index=156&type=chunk) - The company plans to submit an IND for VYN202 by year-end 2023, commence Phase 1a in Q1 2024, and initiate Phase 1b trials in moderate-to-severe plaque psoriasis and rheumatoid arthritis in H2 2024[156](index=156&type=chunk) - A private placement transaction closed on November 1, 2023, raising **$88.2 million** in gross proceeds from the sale of common stock and pre-funded warrants[156](index=156&type=chunk) [Financial Overview](index=28&type=section&id=Financial%20Overview) The company has an accumulated deficit of **$685.1 million** and a net loss of **$22.3 million** for the nine months ended September 30, 2023, with future viability dependent on strategy and financing - The company has an accumulated deficit of **$685.1 million** as of September 30, 2023[150](index=150&type=chunk) - Net loss for the nine months ended September 30, 2023, was **$22.3 million**, compared to **$13.3 million** for the same period in 2022[150](index=150&type=chunk) - Future viability is dependent on successfully executing the business strategy, developing product candidates, and raising additional capital to finance operations[151](index=151&type=chunk) [Components of Operating Results](index=28&type=section&id=Components%20of%20Operating%20Results) Breaks down operating results into revenues (royalty-based), cost of goods sold, and operating expenses, noting continued net operating losses and significant carryforwards - Revenues are primarily from royalty payments related to Finacea, as product sales from AMZEEQ and ZILXI ceased after the MST Franchise sale in January 2022[152](index=152&type=chunk)[153](index=153&type=chunk)[154](index=154&type=chunk) - Research and development expenses are now focused on the immuno-inflammatory pipeline, specifically VYN201 and VYN202, with all such costs expensed as incurred[158](index=158&type=chunk) - The company had federal and state net operating loss carryforwards of **$318.3 million** and **$90.4 million**, respectively, as of December 31, 2022, subject to potential Section 382 limitations[161](index=161&type=chunk)[163](index=163&type=chunk) [Revenues](index=28&type=section&id=Revenues) - Revenue is now solely comprised of royalty revenue, as product sales from AMZEEQ and ZILXI ceased after the MST Franchise sale in January 2022[152](index=152&type=chunk)[153](index=153&type=chunk)[154](index=154&type=chunk) [Cost of Goods Sold](index=28&type=section&id=Cost%20of%20Goods%20Sold) - Cost of goods sold, previously related to AMZEEQ and ZILXI, has been reclassified to discontinued operations following the MST Franchise sale[155](index=155&type=chunk) [Operating Expenses](index=28&type=section&id=Operating%20Expenses) - Operating expenses include research and development (R&D) and selling, general and administrative (SG&A) costs[156](index=156&type=chunk)[159](index=159&type=chunk) [Research and Development Expenses](index=29&type=section&id=Research%20and%20Development%20Expenses) - R&D expenses are primarily related to the development of VYN201 and VYN202, expensed as incurred, and include employee-related costs, third-party agreements, clinical trial materials, and intellectual property costs[158](index=158&type=chunk)[162](index=162&type=chunk) [Selling, General and Administrative Expenses](index=29&type=section&id=Selling%20General%20and%20Administrative%20Expenses) - SG&A expenses include employee-related costs, legal and professional fees, and facility/IT expenses[162](index=162&type=chunk) [Other Income (Expense), net](index=29&type=section&id=Other%20Income%20%28Expense%29%2C%20net) - Other income (expense), net, primarily consists of interest earned on cash and cash equivalents and foreign exchange gains/losses[160](index=160&type=chunk) [Income Taxes and Net Operating Loss Carryforwards](index=29&type=section&id=Income%20Taxes%20and%20Net%20Operating%20Loss%20Carryforwards) - The company has significant federal and state net operating loss (NOL) carryforwards of **$318.3 million** and **$90.4 million**, respectively, as of December 31, 2022, which may be subject to annual limitations under Sections 382 and 383 of the Internal Revenue Code[161](index=161&type=chunk)[163](index=163&type=chunk) [Results of Operations](index=30&type=section&id=Results%20of%20Operations) Compares financial performance for the three and nine months ended September 30, 2023, versus 2022, highlighting changes in revenues, operating expenses, and other income [Comparison of the Three-Month Periods Ended September 30, 2023 and 2022](index=30&type=section&id=Comparison%20of%20the%20Three-Month%20Periods%20Ended%20September%2030%2C%202023%20and%202022) | Metric (in thousands) | Sep 30, 2023 | Sep 30, 2022 | Change ($) | Change (%) | | :-------------------- | :----------- | :----------- | :--------- | :--------- | | Royalty revenues | $114 | $167 | $(53) | (31.7)% | | R&D expenses | $3,318 | $5,546 | $(2,228) | (40.2)% | | SG&A expenses | $3,030 | $3,954 | $(924) | (23.4)% | | Operating loss | $(6,234) | $(9,333) | $(3,099) | (33.2)% | | Net loss | $(6,584) | $(9,459) | $(2,875) | (30.4)% | - Research and development expenses decreased by **$2.2 million** (**40.2%**) due to reduced spending on FMX114 and VYN201, and lower employee-related expenses, partially offset by increased VYN202 spend[166](index=166&type=chunk) - Selling, general and administrative expenses decreased by **$0.9 million** (**23.4%**) primarily due to lower corporate insurance costs and reduced consulting and professional fees[167](index=167&type=chunk) [Comparison of the Nine-Month Periods Ended September 30, 2023 and 2022](index=31&type=section&id=Comparison%20of%20the%20Nine-Month%20Periods%20Ended%20September%2030%2C%202023%20and%202022) | Metric (in thousands) | Sep 30, 2023 | Sep 30, 2022 | Change ($) | Change (%) | | :-------------------- | :----------- | :----------- | :--------- | :--------- | | Royalty revenues | $348 | $471 | $(123) | (26.1)% | | R&D expenses | $13,284 | $14,106 | $(822) | (5.8)% |\n| SG&A expenses | $9,490 | $12,676 | $(3,186) | (25.1)% | | Operating loss | $(22,426) | $(26,311) | $(3,885) | (14.8)% | | Net loss | $(22,264) | $(13,265) | $(8,999) | (67.8)% | - Research and development expenses decreased by **$0.8 million** (**5.8%**) due to lower employee-related expenses and reduced spending on FMX114 and VYN201, partially offset by a **$5.6 million** increase for VYN202, including a **$4.0 million** license payment[171](index=171&type=chunk) - Selling, general and administrative expenses decreased by **$3.2 million** (**25.1%**) driven by lower rent, corporate insurance, employee-related expenses, and consulting fees[172](index=172&type=chunk) - Other income, net, increased significantly from **$0.1 million** to **$0.7 million**, primarily due to higher interest income on cash and cash equivalents[174](index=174&type=chunk) [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) Historically funded by equity, debt, and licensee payments, the company faces continuous losses and negative cash flows, with **$15.5 million** cash and **$685.1 million** accumulated deficit - As of September 30, 2023, the company had **$15.5 million** in cash and cash equivalents and restricted cash, and an accumulated deficit of **$685.1 million**[176](index=176&type=chunk) - Net cash used in operating activities was **$20.2 million** for the nine months ended September 30, 2023[175](index=175&type=chunk)[180](index=180&type=chunk) - A private placement completed on November 1, 2023, generated **$88.2 million** in gross proceeds, which, combined with existing cash, is believed to be sufficient to fund operations for over **12 months**[176](index=176&type=chunk)[178](index=178&type=chunk) - Future funding requirements are substantial and depend on the costs of R&D, regulatory approvals, acquisitions, and intellectual property protection[187](index=187&type=chunk) [Summary Statement of Cash Flows](index=32&type=section&id=Summary%20Statement%20of%20Cash%20Flows) | Cash Flow Activity (in thousands) | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Operating activities | $(20,204) | $(24,389) | | Investing activities | $5,000 | $15,666 | | Financing activities | $(269) | $1,445 | [Net Cash Used in Operating Activities](index=32&type=section&id=Net%20Cash%20Used%20in%20Operating%20Activities) - Net cash used in operating activities was **$20.2 million** for the nine months ended September 30, 2023, primarily reflecting the net loss of **$22.3 million**, adjusted for non-cash stock-based compensation[180](index=180&type=chunk) [Net Cash Provided by Investing Activities](index=33&type=section&id=Net%20Cash%20Provided%20by%20Investing%20Activities) - Net cash provided by investing activities was **$5.0 million** for the nine months ended September 30, 2023, representing the deferred payment received from the MST Franchise sale[182](index=182&type=chunk) [Net Cash (Used in) Provided by Financing Activities](index=33&type=section&id=Net%20Cash%20%28Used%20in%29%20Provided%20by%20Financing%20Activities) - Net cash used in financing activities was **$0.3 million** for the nine months ended September 30, 2023, mainly due to the **$0.4 million** redemption of convertible preferred stock, partially offset by **$0.2 million** from common stock issuance[183](index=183&type=chunk) [Cash and Funding Sources](index=33&type=section&id=Cash%20and%20Funding%20Sources) - Total funding sources for the nine months ended September 30, 2023, were **$5.2 million**, primarily from the MST Franchise sale proceeds (**$5.0 million**) and common stock issuance (**$0.2 million**)[185](index=185&type=chunk) [Funding Requirements](index=33&type=section&id=Funding%20Requirements) - Future funding requirements are dependent on R&D costs, regulatory approval timelines, potential acquisitions/collaborations, new product identification, and intellectual property costs[187](index=187&type=chunk) [Critical Accounting Policies, Significant Judgments and Use of Estimates](index=33&type=section&id=Critical%20Accounting%20Policies%2C%20Significant%20Judgments%20and%20Use%20of%20Estimates) Reiterates that financial statements are prepared using U.S. GAAP, requiring estimates, with no material changes to critical accounting policies since the 2022 Annual Report - The preparation of financial statements requires management to make estimates and assumptions affecting reported amounts[189](index=189&type=chunk) - No material changes to critical accounting policies have occurred for the nine months ended September 30, 2023, compared to the Annual Report on Form 10-K[191](index=191&type=chunk) [Off-Balance Sheet Arrangements](index=34&type=section&id=Off-Balance%20Sheet%20Arrangements) The company is not party to any off-balance sheet arrangements likely to have a material current or future effect on its financial condition or results - The company is not party to any off-balance sheet arrangements that are likely to have a material current or future effect on its financial condition or results[192](index=192&type=chunk) [JOBS Act Accounting Election](index=34&type=section&id=JOBS%20Act%20Accounting%20Election) As an 'emerging growth company,' the company irrevocably opted out of the JOBS Act's extended transition period for new accounting standards, complying as required when adopted - As an 'emerging growth company,' the company has irrevocably opted out of the extended transition period under the JOBS Act for new accounting standards[193](index=193&type=chunk) [Recently Issued and Adopted Accounting Pronouncements](index=34&type=section&id=Recently%20Issued%20and%20Adopted%20Accounting%20Pronouncements) Refers to Note 2 for details on recently issued and adopted accounting pronouncements and their expected impact on financial position and results of operations - Refer to Note 2 for details on recently issued and adopted accounting pronouncements and their expected impact[194](index=194&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=35&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, VYNE Therapeutics Inc. is exempt from providing quantitative and qualitative disclosures about market risk - As a smaller reporting company, VYNE Therapeutics Inc. is exempt from providing quantitative and qualitative disclosures about market risk[196](index=196&type=chunk) [Item 4. Controls and Procedures](index=35&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded the company's disclosure controls and procedures were effective as of September 30, 2023, with no material changes in internal control over financial reporting - The company's disclosure controls and procedures were evaluated as effective at a reasonable assurance level as of September 30, 2023[198](index=198&type=chunk) - No material changes in internal control over financial reporting occurred during the nine months ended September 30, 2023[199](index=199&type=chunk) Part II - Other Information [Item 1. Legal Proceedings](index=36&type=section&id=Item%201.%20Legal%20Proceedings) As of September 30, 2023, no pending legal proceedings or claims are likely to have a material adverse effect on the company - No pending legal proceedings or claims are likely to have a material adverse effect on the company as of September 30, 2023[201](index=201&type=chunk) [Item 1A. Risk Factors](index=36&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors have occurred since the company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022 - No material changes to risk factors have occurred since the Annual Report on Form 10-K for the year ended December 31, 2022[202](index=202&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=36&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or use of proceeds to disclose for the period - No unregistered sales of equity securities or use of proceeds to report[203](index=203&type=chunk) [Item 3. Defaults Upon Senior Securities](index=36&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities to disclose for the period - No defaults upon senior securities to report[204](index=204&type=chunk) [Item 4. Mine Safety Disclosures](index=36&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Mine Safety Disclosures are not applicable to the company[204](index=204&type=chunk) [Item 5. Other Information](index=36&type=section&id=Item%205.%20Other%20Information) No other information to disclose for the period - No other information to report[205](index=205&type=chunk) [Item 6. Exhibits](index=37&type=section&id=Item%206.%20Exhibits) Lists all exhibits filed or furnished as part of this Quarterly Report on Form 10-Q, including corporate governance documents and certifications - The exhibit index includes corporate governance documents (Certificate of Incorporation, Bylaws), CEO and CFO certifications, and XBRL instance and taxonomy documents[207](index=207&type=chunk) Signatures [Signatures](index=39&type=section&id=Signatures) Contains required signatures for the Quarterly Report on Form 10-Q, affirming submission by VYNE Therapeutics Inc.'s CEO and CFO - The report is duly signed by David Domzalski, Director and Chief Executive Officer, and Tyler Zeronda, Chief Financial Officer, on November 13, 2023[213](index=213&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ___ TO ___. Commission file number 001-38356 VYNE THERAPEUTICS INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation o ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ___ TO ___. Commission file number 001-38356 VYNE THERAPEUTICS INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ___ TO ___. Commission File Number 001-38356 VYNE THERAPEUTICS INC. (Exact name of registrant as specified in its charter) Delaware 45-3757789 (S ...

[FORM 10-Q Filing Information](index=1&type=section&id=FORM%2010-Q%20Filing%20Information) This section provides the standard cover page information for the Quarterly Report on Form 10-Q for the period ended September 30, 2022, including registrant details, securities registered, and filer status - The registrant, VYNE Therapeutics Inc., is filing a Quarterly Report on Form 10-Q for the period ended September 30, 2022[2](index=2&type=chunk) Registrant Filer Status | Filer Status | Indication | | :---------------------- | :--------- | | Large accelerated filer | ☐ | | Accelerated filer | ☐ | | Non-accelerated filer | ☒ | | Smaller reporting company | ☒ | | Emerging growth company | ☒ | - As of November 1, 2022, there were **58,035,827 shares of Common Stock outstanding**[7](index=7&type=chunk) [Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) This section outlines the forward-looking statements contained in the Form 10-Q, cautioning investors about inherent risks and uncertainties that could cause actual results to differ materially from projections - The report contains forward-looking statements reflecting management's current beliefs and expectations, which involve known and unknown risks and uncertainties[12](index=12&type=chunk) - Key factors that could cause future results to differ materially include the ability to execute business strategy, identify and execute strategic transactions, raise additional financing, successfully complete clinical trials, and obtain regulatory approvals[13](index=13&type=chunk)[17](index=17&type=chunk) - The company assumes no obligation to update these forward-looking statements, except as required by law[16](index=16&type=chunk) [Part I – Financial Information](index=6&type=section&id=Part%20I%20%E2%80%93%20Financial%20Information) Part I presents VYNE Therapeutics Inc.'s unaudited condensed consolidated financial statements for the quarter ended September 30, 2022, along with management's discussion and analysis of financial condition and results of operations [Item 1. Unaudited Condensed Consolidated Financial Statements](index=6&type=section&id=Item%201.%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, changes in stockholders' equity, and cash flows, along with detailed notes [Unaudited Condensed Consolidated Balance Sheets](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheet Highlights (in thousands USD) | Metric | Sep 30, 2022 | Dec 31, 2021 | Change (2022 vs 2021) | | :-------------------------------- | :----------- | :----------- | :-------------------- | | Cash and cash equivalents | $35,510 | $42,250 | $(6,740) | | Total Current Assets | $44,046 | $63,186 | $(19,140) | | Total Assets | $46,908 | $67,046 | $(20,138) | | Total Liabilities | $6,839 | $18,410 | $(11,571) | | Total Stockholders' Equity | $40,069 | $48,636 | $(8,567) | | Accumulated Deficit | $(652,790) | $(639,525) | $(13,265) | - The decrease in total current assets is primarily due to a reduction in trade receivables and the reclassification of discontinued operations assets[19](index=19&type=chunk) - Total liabilities significantly decreased, mainly driven by reductions in trade payables and accrued expenses[19](index=19&type=chunk) [Unaudited Condensed Consolidated Statements Of Operations](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20Of%20Operations) Condensed Consolidated Statements of Operations Highlights (in thousands USD, except per share data) | Metric | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | | :------------------------------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Royalty Revenues | $167 | $133 | $471 | $658 | | Total Operating Expenses | $9,500 | $10,900 | $26,782 | $30,723 | | Operating Loss | $(9,333) | $(10,767) | $(26,311) | $(30,065) | | Loss from continuing operations | $(9,255) | $(14,276) | $(26,184) | $(35,836) | | (Loss) income from discontinued operations | $(204) | $(7,009) | $12,919 | $(25,923) | | Net Loss | $(9,459) | $(21,285) | $(13,265) | $(61,759) | | Loss per share, basic and diluted | $(0.16) | $(0.41) | $(0.23) | $(1.22) | - Net loss significantly decreased for both the three and nine months ended September 30, 2022, primarily due to income from discontinued operations in 2022 and reduced operating expenses[21](index=21&type=chunk) - Interest expense was eliminated in 2022 due to the payment of all outstanding debt in August 2021[21](index=21&type=chunk) [Unaudited Condensed Consolidated Statements Of Changes In Stockholders' Equity](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20Of%20Changes%20In%20Stockholders%27%20Equity) Changes in Stockholders' Equity (in thousands USD, except share data) | Metric | Balance at Jan 1, 2022 | Net Loss | Stock-based Compensation | Issuance of Common Stock (ATM) | Balance at Sep 30, 2022 | | :----------------------- | :--------------------- | :------- | :----------------------- | :----------------------------- | :---------------------- | | Common Stock (Shares) | 53,577,744 | — | 202,635 | 2,587,855 | 58,035,827 | | Common Stock (Amounts) | $5 | — | — | $1 | $6 | | Additional Paid-in Capital | $688,156 | — | $3,230 | $1,470 | $692,853 | | Accumulated Deficit | $(639,525) | $(13,265) | — | — | $(652,790) | | Total Stockholders' Equity | $48,636 | $(13,265) | $3,230 | $1,471 | $40,069 | - The increase in common stock shares and additional paid-in capital is primarily due to the issuance of shares under an at-the-market offering and stock-based compensation[23](index=23&type=chunk) - The accumulated deficit increased by **$13.3 million** for the nine months ended September 30, 2022, reflecting the net loss[23](index=23&type=chunk) [Unaudited Condensed Consolidated Statements Of Cash Flows](index=10&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20Of%20Cash%20Flows) Condensed Consolidated Statements of Cash Flows Highlights (in thousands USD) | Cash Flow Activity | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | | :------------------------- | :-------------------------- | :-------------------------- | | Operating Activities | $(25,325) | $(46,349) | | Investing Activities | $16,602 | $1,027 | | Financing Activities | $1,445 | $39,815 | | Decrease in cash, cash equivalents and restricted cash | $(7,278) | $(5,507) | | Cash, cash equivalents and restricted cash at end of period | $35,577 | $52,911 | - Net cash used in operating activities decreased significantly in 2022, primarily due to a lower net loss and the gain on the sale of the MST Franchise[29](index=29&type=chunk) - Investing activities provided substantial cash in 2022, driven by net proceeds from the sale of the MST Franchise[29](index=29&type=chunk) - Cash provided by financing activities decreased in 2022 compared to 2021, which included significant proceeds from common stock offerings and debt repayment[29](index=29&type=chunk) [Notes to Unaudited Interim Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Unaudited%20Interim%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed explanations and disclosures for the unaudited interim condensed consolidated financial statements, covering the company's operations, significant accounting policies, and subsequent events [NOTE 1 - NATURE OF OPERATIONS](index=11&type=section&id=NOTE%201%20-%20NATURE%20OF%20OPERATIONS) VYNE Therapeutics Inc. is a biopharmaceutical company focused on developing BET inhibitor compounds for immuno-inflammatory conditions, having divested its MST Franchise to refocus on its pipeline - VYNE Therapeutics is a biopharmaceutical company developing BET inhibitor compounds for immuno-inflammatory conditions, with VYN201 as its initial candidate for vitiligo, expected to initiate clinical trials in November 2022[33](index=33&type=chunk)[111](index=111&type=chunk) - The Phase 2a clinical trial for FMX114 in mild-to-moderate atopic dermatitis did not meet its primary endpoint at week 4, but showed statistical superiority to vehicle at weeks 1, 2, and 3, and potential for more moderate-to-severe AD[34](index=34&type=chunk)[112](index=112&type=chunk) - On January 12, 2022, the company sold its MST Franchise (AMZEEQ, ZILXI, FCD105) to Journey Medical Corporation for an upfront payment of **$20.0 million** and an additional **$5.0 million** on the one-year anniversary, plus potential sales milestone payments up to **$450.0 million**[37](index=37&type=chunk)[38](index=38&type=chunk)[114](index=114&type=chunk)[115](index=115&type=chunk) - The company exercised an option with Tay Therapeutics for topical BET inhibitor compounds and expects to exercise an option for oral BET inhibitor compounds by February 28, 2023, involving milestone payments and royalties[39](index=39&type=chunk)[40](index=40&type=chunk)[41](index=41&type=chunk)[42](index=42&type=chunk) - Following the divestiture, the company streamlined operations and reduced its workforce to approximately **28 employees**[43](index=43&type=chunk)[116](index=116&type=chunk) - A one-for-four reverse stock split was effected on February 12, 2021, reducing authorized shares from 300 million to 75 million[44](index=44&type=chunk) - The company has incurred significant losses and negative operating cash flows since inception and requires substantial additional financing to continue as a going concern beyond one year from the financial statements' issuance date[47](index=47&type=chunk)[51](index=51&type=chunk)[52](index=52&type=chunk)[146](index=146&type=chunk)[150](index=150&type=chunk)[151](index=151&type=chunk) [NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES](index=14&type=section&id=NOTE%202%20-%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note details the significant accounting policies used in preparing the unaudited interim condensed consolidated financial statements, including basis of presentation, revenue recognition, and discontinued operations - The financial statements are prepared in accordance with U.S. GAAP for interim financial statements, with certain information condensed or omitted[54](index=54&type=chunk) - The company no longer has revenue-generating products from the MST Franchise after January 2022 but continues to receive royalty revenues[62](index=62&type=chunk) - The company accounts for revenue under ASC Topic 606, recognizing revenue when customers obtain control of products or when performance obligations are satisfied[62](index=62&type=chunk) Anti-Dilutive Securities Excluded from EPS Calculation (Shares) | Item | September 30, 2022 | September 30, 2021 | | :---------------------------------------- | :------------------- | :------------------- | | Outstanding stock options, RSUs and shares under the ESPP | 5,850,390 | 5,303,135 | | Warrants | 495,165 | 495,165 | - The sale of the MST Franchise was classified as discontinued operations in accordance with ASC 205, reflecting a strategic shift[73](index=73&type=chunk)[76](index=76&type=chunk) - As a smaller reporting company, the adoption of ASU 2016-13 (Credit Losses) is effective January 1, 2023, and is not expected to have a material impact[75](index=75&type=chunk) [NOTE 3 – DISCONTINUED OPERATIONS](index=17&type=section&id=NOTE%203%20%E2%80%93%20DISCONTINUED%20OPERATIONS) This note provides detailed financial results and carrying amounts for the MST Franchise, which was sold on January 12, 2022, and classified as discontinued operations - The MST Franchise was sold on January 12, 2022, and its results are classified as discontinued operations[76](index=76&type=chunk) Income (Loss) from Discontinued Operations (in thousands USD) | Metric | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | | :------------------------------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Product sales | $— | $3,953 | $106 | $11,805 | | Total operating expenses | $117 | $9,913 | $25 | $35,283 | | Income (loss) from discontinued operations, before income taxes | $(204) | $(7,009) | $12,919 | $(25,923) | | Net income (loss) from discontinued operations | $(204) | $(7,009) | $12,919 | $(25,923) | Gain on Sale of MST Franchise (in thousands USD) | Item | 9 Months Ended Sep 30, 2022 | | :-------------------------------- | :-------------------------- | | Cash proceeds | $20,000 | | Proceeds to be paid in January 2023 | $5,000 | | Less transaction costs | $(4,334) | | Less book value of sold assets | $(7,748) | | Gain on sale, net of tax | $12,918 | - Contingent consideration from milestone payments for sales of ZILXI, AMZEEQ, and FCD105 will be recognized when realizable[80](index=80&type=chunk) [NOTE 4 – SHARE CAPITAL](index=18&type=section&id=NOTE%204%20%E2%80%93%20SHARE%20CAPITAL) This note details the company's authorized and outstanding share capital, including common and preferred stock, and recent issuances of common stock through at-the-market offerings - As of September 30, 2022, the company is authorized to issue **150,000,000 shares of common stock** and **20,000,000 shares of preferred stock**, with **58,035,827 common shares outstanding** and no preferred shares[81](index=81&type=chunk) - During the nine months ended September 30, 2022, the company issued **2,587,855 shares of common stock** through an at-the-market offering for **$1.5 million** in net proceeds[86](index=86&type=chunk) - In March 2022, the company entered into an Equity Purchase Agreement with Lincoln Park Capital Fund, LLC, allowing it to sell up to **$30.0 million** of common stock over 36 months, and issued **1,667,593 commitment shares**[87](index=87&type=chunk) - The company had **495,165 equity-classified warrants outstanding** as of September 30, 2022, with an exercise price of **$4.27**, subject to a 'Down Round Feature' adjustment[88](index=88&type=chunk) [NOTE 5 – SHARE BASED COMPENSATION](index=20&type=section&id=NOTE%205%20%E2%80%93%20SHARE%20BASED%20COMPENSATION) This note outlines the company's equity incentive plans and Employee Share Purchase Plan, detailing shares available for grant, options, and RSUs granted, and stock-based compensation expense - As of September 30, 2022, **916,535 shares** remain issuable under the 2019 Equity Incentive Plan and **220,357 shares** under the 2018 Omnibus Incentive Plan[89](index=89&type=chunk) - The Employee Share Purchase Plan (ESPP) allows employees to purchase common stock at **85%** of the lesser of the fair market value at the beginning or end of each semi-annual period, with **2,165,534 shares** remaining available for grant[90](index=90&type=chunk)[91](index=91&type=chunk) Options and RSUs Granted to Employees and Directors (9 Months Ended Sep 30, 2022) | Award Type | Amount | Exercise Price Range | Vesting Period | Expiration | | :--------- | :-------- | :------------------- | :------------- | :--------- | | Options | 879,503 | $0.31 - $0.61 | 1 year - 4 years | 10 years | | RSUs | 726,102 | — | 4 years | — | Stock-Based Compensation Expense (in thousands USD) | Expense Category | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | | :------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Research and development | $355 | $435 | $977 | $1,335 | | Selling, general and administrative | $819 | $1,662 | $2,605 | $4,334 | | Discontinued operations | $— | $308 | $(352) | $1,079 | | Total | $1,174 | $2,405 | $3,230 | $6,748 | [NOTE 6 – OPERATING LEASES](index=21&type=section&id=NOTE%206%20%E2%80%93%20OPERATING%20LEASES) This note describes the company's operating lease agreements for its corporate offices, including the transition to a smaller headquarters and new lease agreements - The lease for the principal executive office in Bridgewater, New Jersey, expired on September 30, 2022[96](index=96&type=chunk)[97](index=97&type=chunk) - In November 2022, the company transitioned to a smaller corporate headquarters, signing a sublease through September 30, 2023, and a master lease through September 30, 2025[98](index=98&type=chunk) - A **$0.6 million** lien on cash related to bank guarantees for lease agreements was released in April 2022[100](index=100&type=chunk) [NOTE 7 – COMMITMENTS AND CONTINGENCIES](index=21&type=section&id=NOTE%207%20%E2%80%93%20COMMITMENTS%20AND%20CONTINGENCIES) This note states that as of September 30, 2022, there are no pending legal proceedings or claims against the company that management believes are likely to have a material adverse effect - As of September 30, 2022, no claims or actions are pending against the company that are likely to have a material adverse effect[101](index=101&type=chunk) [NOTE 8 – SUBSEQUENT EVENTS](index=21&type=section&id=NOTE%208%20%E2%80%93%20SUBSEQUENT%20EVENTS) This note discloses subsequent events after September 30, 2022, including a private placement of Series A Convertible Preferred Stock and a proposal for a reverse stock split - On November 11, 2022, the company entered into a Securities Purchase Agreement for a private placement of **3,000 shares of Series A Convertible Preferred Stock** for **$300,000**[102](index=102&type=chunk)[103](index=103&type=chunk) - The Purchase Agreement requires the company to convene a stockholder meeting by January 31, 2023, to approve a reverse stock split of its common stock[103](index=103&type=chunk)[104](index=104&type=chunk) - Each share of Series A Preferred Stock carries **1,000,000 votes** on the reverse stock split proposal, which will be automatically voted in the same proportion as common stock[105](index=105&type=chunk) - Series A Preferred Stock is convertible into common stock at **$0.26 per share** (subject to adjustments) and is redeemable by the company at **120% of stated value** or by the holder at **130% of stated value** under certain conditions[106](index=106&type=chunk)[107](index=107&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and results of operations, emphasizing the strategic shift to immuno-inflammatory conditions and the financial impact of the MST Franchise divestiture [Company Overview](index=23&type=section&id=Company%20Overview) - VYNE Therapeutics is a biopharmaceutical company focused on developing BET inhibitor compounds for immuno-inflammatory conditions, with VYN201 for vitiligo as a key candidate[111](index=111&type=chunk) - The Phase 2a trial for FMX114 in mild-to-moderate atopic dermatitis did not meet its primary endpoint at week 4 but showed statistical superiority at weeks 1, 2, and 3, leading to an evaluation of its development strategy[112](index=112&type=chunk) - The company divested its MST Franchise (AMZEEQ, ZILXI, FCD105) to Journey Medical Corporation on January 12, 2022, to refocus resources on immuno-inflammatory development programs[113](index=113&type=chunk)[114](index=114&type=chunk) - The divestiture included an upfront payment of **$20.0 million**, a **$5.0 million** payment on the one-year anniversary, and potential sales milestone payments up to **$450.0 million**[115](index=115&type=chunk) - Workforce was reduced from **106 to 28 employees** following the MST Franchise sale[116](index=116&type=chunk) [Key Developments](index=24&type=section&id=Key%20Developments) - FMX114 Phase 2a trial for atopic dermatitis did not meet its primary endpoint at week 4 but showed statistical superiority at weeks 1, 2, and 3, leading to a re-evaluation of its development strategy[117](index=117&type=chunk) - A payment of **$997,407 (£850,000)** was made to Tay Therapeutics on August 29, 2022, for Oral BETi Compounds meeting the required molecular profile, with an anticipated exercise of the exclusive option by February 28, 2023[117](index=117&type=chunk) - The company received an extension until February 27, 2023, to regain compliance with Nasdaq's minimum bid price requirement, and its common stock was transferred to the Nasdaq Capital Market[117](index=117&type=chunk) - The U.S. IND for the Phase 1a/b clinical trial evaluating VYN201 for vitiligo was filed in October 2022, with the first patient expected in November 2022 and top-line proof-of-concept data anticipated in the first half of 2023[117](index=117&type=chunk) [Components of Operating Results](index=24&type=section&id=Components%20of%20Operating%20Results) - The company incurred net losses since inception, with a net loss of **$13.3 million** for the nine months ended September 30, 2022, driven by a **$26.2 million** loss from continuing operations offset by **$12.9 million** income from discontinued operations[117](index=117&type=chunk) - Following the MST Franchise sale in January 2022, the company no longer generates revenue from AMZEEQ or ZILXI sales; product sales are reclassified to discontinued operations[120](index=120&type=chunk) - Royalty revenues from Finacea were **$0.5 million** and **$0.7 million** for the nine months ended September 30, 2022 and 2021, respectively[121](index=121&type=chunk) - Research and development expenses are primarily related to FMX114, VYN201, and VYN202, with all such expenses charged to operations as incurred[123](index=123&type=chunk) - Selling, general and administrative expenses include employee-related expenses, legal and professional fees, and facility costs[125](index=125&type=chunk)[132](index=132&type=chunk) - No interest expense was incurred in the three or nine months ended September 30, 2022, due to the payment of all outstanding debt in August 2021[127](index=127&type=chunk)[143](index=143&type=chunk) - The company has significant federal and state net operating loss (NOL) carryforwards of **$315.0 million** and **$105.6 million**, respectively, as of December 31, 2021[129](index=129&type=chunk) [Results of Operations](index=26&type=section&id=Results%20of%20Operations) This section provides a detailed comparison of the company's financial performance for the three-month and nine-month periods ended September 30, 2022, and 2021, highlighting changes in revenues, operating expenses, and net loss [Comparison of the Three-Month Periods Ended September 30, 2022 and 2021](index=26&type=section&id=Comparison%20of%20the%20Three-Month%20Periods%20Ended%20September%2030%2C%202022%20and%202021) Three-Month Period Financial Comparison (in thousands USD) | Metric | Sep 30, 2022 | Sep 30, 2021 | Change ($) | Change (%) | | :------------------------------------------ | :----------- | :----------- | :--------- | :--------- | | Royalty Revenues | $167 | $133 | $34 | 25.6% | | Research and development | $5,546 | $5,917 | $(371) | (6.3)% | | Selling, general and administrative | $3,954 | $4,983 | $(1,029) | (20.7)% | | Total operating expenses | $9,500 | $10,900 | $(1,400) | (12.8)% | | Operating loss | $(9,333) | $(10,767) | $(1,434) | (13.3)% | | Interest expense | $— | $(3,474) | $(3,474) | (100.0)% | | Loss from continuing operations | $(9,255) | $(14,276) | $(5,021) | (35.2)% | | Loss from discontinued operations | $(204) | $(7,009) | $(6,805) | (97.1)% | | Net loss | $(9,459) | $(21,285) | $(11,826) | (55.6)% | - Research and development expenses decreased by **$0.4 million**, primarily due to lower employee-related expenses and other R&D activities, partially offset by a **$1.0 million** option extension payment for Oral BETi[135](index=135&type=chunk) - Selling, general and administrative expenses decreased by **$1.0 million**, driven by reductions in consulting and employee-related expenses[136](index=136&type=chunk) [Comparison of the Nine-Month Periods Ended September 30, 2022 and 2021](index=28&type=section&id=Comparison%20of%20the%20Nine-Month%20Periods%20Ended%20September%2030%2C%202022%20and%202021) Nine-Month Period Financial Comparison (in thousands USD) | Metric | Sep 30, 2022 | Sep 30, 2021 | Change ($) | Change (%) | | :------------------------------------------ | :----------- | :----------- | :--------- | :--------- | | Royalty Revenues | $471 | $658 | $(187) | (28.4)% | | Research and development | $14,106 | $15,219 | $(1,113) | (7.3)% | | Selling, general and administrative | $12,676 | $15,504 | $(2,828) | (18.2)% | | Total operating expenses | $26,782 | $30,723 | $(3,941) | (12.8)% | | Operating loss | $(26,311) | $(30,065) | $(3,754) | (12.5)% | | Interest expense | $— | $(5,610) | $(5,610) | (100.0)% | | Loss from continuing operations | $(26,184) | $(35,836) | $(9,652) | (26.9)% | | Income (loss) from discontinued operations | $12,919 | $(25,923) | $38,842 | 149.8% | | Net loss | $(13,265) | $(61,759) | $(48,494) | (78.5)% | - Research and development expenses decreased by **$1.1 million**, mainly due to lower employee-related expenses and reduced FMX114 spending, partially offset by **$1.4 million** in payments for the Oral BETi Option extension[141](index=141&type=chunk) - Selling, general and administrative expenses decreased by **$2.8 million**, primarily due to lower employee-related and consulting expenses[142](index=142&type=chunk) [Liquidity and Capital Resources](index=29&type=section&id=Liquidity%20and%20Capital%20Resources) - The company has funded operations primarily through equity, debt, warrants, and licensee payments, incurring losses and negative operating cash flows since inception[146](index=146&type=chunk) - As of September 30, 2022, cash and cash equivalents, and restricted cash totaled **$35.6 million**, with an accumulated deficit of **$652.8 million**[147](index=147&type=chunk) - The company received **$20.0 million** from the MST Franchise sale in January 2022 and expects an additional **$5.0 million** payment[147](index=147&type=chunk) - The company's ability to continue as a going concern is dependent on raising sufficient working capital through debt or equity financings, as current cash is insufficient to fund operations beyond one year[149](index=149&type=chunk)[150](index=150&type=chunk) - The company is subject to 'baby shelf rules,' limiting primary public offerings to one-third of its public float until it exceeds **$75.0 million**[150](index=150&type=chunk)[151](index=151&type=chunk) [Summary Statement of Cash Flows](index=30&type=section&id=Summary%20Statement%20of%20Cash%20Flows) Summary Statement of Cash Flows (in thousands USD) | Cash Flow Activity | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | | :------------------------- | :-------------------------- | :-------------------------- | | Operating activities | $(25,325) | $(46,349) | | Investing activities | $16,602 | $1,027 | | Financing activities | $1,445 | $39,815 | - Net cash used in operating activities decreased in 2022 due to a lower net loss and the gain on the MST Franchise sale[153](index=153&type=chunk) - Net cash provided by investing activities increased significantly in 2022, primarily from the net proceeds of the MST Franchise disposition[155](index=155&type=chunk) - Net cash provided by financing activities decreased in 2022, as 2021 included substantial proceeds from common stock offerings and debt repayment[156](index=156&type=chunk) [Cash and Funding Sources](index=30&type=section&id=Cash%20and%20Funding%20Sources) - In the nine months ended September 30, 2022, liquidity sources included proceeds from the MST Franchise sale and common stock issuance via an at-the-market offering[157](index=157&type=chunk) - In the nine months ended September 30, 2021, liquidity sources were primarily proceeds from common stock issuances (at-the-market and registered direct offerings) and sales of AMZEEQ and ZILXI[158](index=158&type=chunk) [Funding Requirements](index=31&type=section&id=Funding%20Requirements) - Future funding requirements depend on factors such as R&D costs for product candidates, regulatory approval timelines, terms of acquisitions/collaborations, new product identification, and intellectual property costs[160](index=160&type=chunk) - The company may need additional capital sooner than planned, potentially through equity or debt financings, or strategic collaborations, which could result in dilution or other restrictions[160](index=160&type=chunk) [Critical Accounting Policies, Significant Judgments and Use of Estimates](index=31&type=section&id=Critical%20Accounting%20Policies%2C%20Significant%20Judgments%20and%20Use%20of%20Estimates) - The preparation of financial statements requires management to make estimates and assumptions, particularly for research and development accruals and share-based compensation valuation[162](index=162&type=chunk) - Critical accounting policies include revenue recognition (ASC 606) and discontinued operations (ASC 205), which involve significant judgments regarding performance obligations, transaction prices, and strategic shifts[165](index=165&type=chunk)[169](index=169&type=chunk) - The company has opted out of the extended transition period for complying with new or revised accounting standards under the JOBS Act[172](index=172&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=33&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, VYNE Therapeutics Inc. is not required to provide the information typically set forth in this item regarding quantitative and qualitative disclosures about market risk - The company is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[175](index=175&type=chunk) [Item 4. Controls and Procedures](index=33&type=section&id=Item%204.%20Controls%20and%20Procedures) This section reports on the effectiveness of the company's disclosure controls and procedures and internal control over financial reporting - Management, with CEO and CFO participation, concluded that disclosure controls and procedures were effective at a reasonable assurance level as of September 30, 2022[176](index=176&type=chunk) - There were no material changes in internal control over financial reporting during the nine months ended September 30, 2022[177](index=177&type=chunk) [Part II – Other Information](index=34&type=section&id=Part%20II%20%E2%80%93%20Other%20Information) Part II provides additional information not covered in the financial statements, including legal proceedings, updated risk factors, details on recent equity transactions, and a list of exhibits filed with the report [Item 1. Legal Proceedings](index=34&type=section&id=Item%201.%20Legal%20Proceedings) This section states that as of September 30, 2022, there are no pending legal proceedings or claims against the company that management believes are likely to have a material adverse effect - As of September 30, 2022, no claims or actions are pending against the company that are likely to have a material adverse effect[179](index=179&type=chunk) [Item 1A. Risk Factors](index=34&type=section&id=Item%201A.%20Risk%20Factors) This section refers to the risk factors disclosed in the company's Annual Report on Form 10-K, with an emphasis on the substantial doubt about the company's ability to continue as a going concern due to significant funding requirements - Information about risk factors is contained in the Annual Report on Form 10-K for the year ended December 31, 2021, with no material changes as of September 30, 2022, except as noted[180](index=180&type=chunk) - The company will need substantial additional funding to finance operations and may not be able to continue as a going concern, potentially leading to delays, reductions, or termination of R&D activities[181](index=181&type=chunk)[182](index=182&type=chunk) - As of September 30, 2022, the company had approximately **$35.6 million** in cash and cash equivalents and restricted cash, which is insufficient to fund anticipated operations for the next twelve months, raising substantial doubt about its going concern ability[182](index=182&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=34&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This item indicates that there were no unregistered sales of equity securities or use of proceeds to report for the period - There were no unregistered sales of equity securities and use of proceeds to report[183](index=183&type=chunk) [Item 3. Defaults Upon Senior Securities](index=34&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item indicates that there were no defaults upon senior securities to report for the period - There were no defaults upon senior securities to report[183](index=183&type=chunk) [Item 4. Mine Safety Disclosures](index=34&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Mine Safety Disclosures are not applicable to the company[183](index=183&type=chunk) [Item 5. Other Information](index=34&type=section&id=Item%205.%20Other%20Information) This section details significant agreements entered into after the reporting period, including a Securities Purchase Agreement for Series A Convertible Preferred Stock and amendments to the company's Bylaws - On November 11, 2022, the company entered into a Securities Purchase Agreement to issue **3,000 shares of Series A Convertible Preferred Stock** for **$300,000** in a private placement[184](index=184&type=chunk)[185](index=185&type=chunk) - The agreement mandates a stockholder meeting by January 31, 2023, to approve a reverse stock split, with Series A Preferred holders having **1,000,000 votes per share** on this proposal, mirroring common stock votes[186](index=186&type=chunk)[187](index=187&type=chunk) - The Series A Preferred Stock is convertible at **$0.26 per share** (subject to adjustments) and has redemption rights for the company (**120% of stated value**) and holders (**130% of stated value**)[191](index=191&type=chunk)[192](index=192&type=chunk) - A Registration Rights Agreement requires the company to file a registration statement for the Series A Preferred shares if not fully redeemed[193](index=193&type=chunk) - On November 10, 2022, the Board approved amendments to the Bylaws, modifying quorum requirements for stockholder meetings to include specific thresholds for both total voting power and common stock[195](index=195&type=chunk) [Item 6. Exhibits](index=37&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Quarterly Report on Form 10-Q, including corporate documents, material agreements, certifications, and XBRL interactive data files - The exhibit index includes corporate documents (Certificate of Incorporation, Bylaws), material agreements (Securities Purchase Agreement, Registration Rights Agreement), CEO/CFO certifications, and XBRL instance documents[197](index=197&type=chunk)[198](index=198&type=chunk) [SIGNATURES](index=39&type=section&id=SIGNATURES) This section contains the required signatures for the Quarterly Report on Form 10-Q, confirming its due authorization and filing - The report is duly signed by David Domzalski, President and Chief Executive Officer, and Tyler Zeronda, Chief Financial Officer and Treasurer, on November 14, 2022[202](index=202&type=chunk)[203](index=203&type=chunk)

Part I – Financial Information This section presents the unaudited condensed consolidated financial statements and management's discussion and analysis of financial condition and results of operations [Item 1. Unaudited Condensed Consolidated Financial Statements](index=5&type=section&id=Item%201.%20Unaudited%20Financial%20Statements) This section presents VYNE Therapeutics Inc.'s unaudited condensed consolidated financial statements and detailed notes for the specified periods [Unaudited Condensed Consolidated Balance Sheets](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) This section presents the company's financial position, detailing assets, liabilities, and stockholders' equity at specific dates Unaudited Condensed Consolidated Balance Sheets (in thousands) | Metric (in thousands) | June 30, 2022 | December 31, 2021 | | :-------------------- | :------------ | :---------------- | | Cash and cash equivalents | $42,814 | $42,250 | | Restricted cash | — | $605 | | Trade receivables, net | $304 | $7,583 | | Amount due from sale of MST Franchise | $5,000 | — | | Total Current Assets | $51,920 | $63,186 | | Total Assets | $55,192 | $67,046 | | Total Liabilities | $6,835 | $18,410 | | Total Stockholders' Equity | $48,357 | $48,636 | | Accumulated deficit | $(643,331) | $(639,525) | - Total Current Assets decreased by **$11,266 thousand** (**17.8%**) from **$63,186 thousand** at December 31, 2021, to **$51,920 thousand** at June 30, 2022, primarily due to decreases in trade receivables and discontinued operations assets, partially offset by an amount due from the sale of the MST Franchise[20](index=20&type=chunk) - Total Liabilities significantly decreased by **$11,575 thousand** (**62.9%**) from **$18,410 thousand** at December 31, 2021, to **$6,835 thousand** at June 30, 2022[20](index=20&type=chunk) [Unaudited Condensed Consolidated Statements Of Operations](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20Of%20Operations) This section details the company's financial performance, including revenues, expenses, and net loss over specific periods Condensed Consolidated Statements of Operations (Three Months Ended June 30) | Metric (in thousands, except per share) | 2022 | 2021 | Change ($) | Change (%) | | :-------------------------------------- | :---------- | :---------- | :---------- | :---------- | | Royalty Revenues | $126 | $295 | $(169) | (57.3)% | | Research and development | $4,108 | $5,048 | $(940) | (18.6)% | | Selling, general and administrative | $4,305 | $4,789 | $(484) | (10.1)% | | Operating loss | $(8,287) | $(9,542) | $1,255 | (13.2)% | | Net loss | $(8,476) | $(19,924) | $11,448 | (57.5)% | | Loss per share, basic and diluted | $(0.15) | $(0.39) | $0.24 | (61.5)% | Condensed Consolidated Statements of Operations (Six Months Ended June 30) | Metric (in thousands, except per share) | 2022 | 2021 | Change ($) | Change (%) | | :-------------------------------------- | :---------- | :---------- | :---------- | :---------- | | Royalty Revenues | $304 | $525 | $(221) | (42.1)% | | Research and development | $8,560 | $9,303 | $(743) | (8.0)% |\ | Selling, general and administrative | $8,722 | $10,521 | $(1,799) | (17.1)% | | Operating loss | $(16,978) | $(19,299) | $2,321 | (12.0)% | | Income (loss) from discontinued operations | $13,123 | $(18,913) | $32,036 | (169.4)% | | Net loss | $(3,806) | $(40,474) | $36,668 | (90.6)% | | Loss per share, basic and diluted | $(0.07) | $(0.81) | $0.74 | (91.4)% | - The significant improvement in net loss for both the three and six months ended June 30, 2022, was primarily driven by income from discontinued operations (**$13.1 million** for six months) due to the gain on the sale of the MST Franchise, and reduced operating expenses[22](index=22&type=chunk)[110](index=110&type=chunk)[129](index=129&type=chunk) [Unaudited Condensed Consolidated Statements Of Changes In Stockholders' Equity](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20Of%20Changes%20In%20Stockholders%27%20Equity) This section outlines changes in the company's equity, including common stock, additional paid-in capital, and accumulated deficit Changes in Stockholders' Equity (Six Months Ended June 30) | Metric (in thousands, except shares) | January 1, 2022 | June 30, 2022 | | :----------------------------------- | :-------------- | :------------ | | Common stock (shares) | 53,577,744 | 58,005,616 | | Common stock (amounts) | $5 | $6 | | Additional paid-in capital | $688,156 | $691,682 | | Accumulated deficit | $(639,525) | $(643,331) | | Total Stockholders' Equity | $48,636 | $48,357 | - Total Stockholders' Equity decreased slightly from **$48,636 thousand** at January 1, 2022, to **$48,357 thousand** at June 30, 2022, primarily due to the net loss of **$3,806 thousand**, partially offset by increases in additional paid-in capital from stock-based compensation and common stock issuance[26](index=26&type=chunk) - The number of common shares outstanding increased from **53,577,744** at January 1, 2022, to **58,005,616** at June 30, 2022, driven by vesting of restricted stock units, issuance of commitment shares, and common stock issuance[26](index=26&type=chunk) [Unaudited Condensed Consolidated Statements Of Cash Flows](index=9&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20Of%20Cash%20Flows) This section presents the company's cash inflows and outflows from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows (Six Months Ended June 30) | Cash Flow Activity (in thousands) | 2022 | 2021 | | :-------------------------------- | :---------- | :---------- | | Net cash used in operating activities | $(18,200) | $(28,808) | | Net cash provided by investing activities | $16,688 | $1,027 | | Net cash provided by financing activities | $1,471 | $73,374 | | (Decrease) increase in cash, cash equivalents and restricted cash | $(41) | $45,593 | | Cash, cash equivalents and restricted cash at end of period | $42,814 | $104,011 | - Net cash used in operating activities decreased by **$10.6 million**, from **$28.8 million** in 2021 to **$18.2 million** in 2022, primarily due to a lower net loss and the gain on the sale of the MST Franchise[32](index=32&type=chunk)[142](index=142&type=chunk)[143](index=143&type=chunk) - Net cash provided by investing activities significantly increased to **$16.7 million** in 2022 from **$1.0 million** in 2021, driven by net proceeds from the sale of the MST Franchise[32](index=32&type=chunk)[144](index=144&type=chunk) - Net cash provided by financing activities decreased substantially to **$1.5 million** in 2022 from **$73.4 million** in 2021, reflecting reduced proceeds from common stock issuances[32](index=32&type=chunk)[145](index=145&type=chunk) [Notes to Unaudited Interim Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Unaudited%20Interim%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the interim condensed consolidated financial statements [NOTE 1 - NATURE OF OPERATIONS](index=11&type=section&id=NOTE%201%20-%20NATURE%20OF%20OPERATIONS) This note describes the company's business, strategic focus, and going concern considerations - VYNE Therapeutics Inc. is a biopharmaceutical company focused on developing proprietary therapies for immuno-inflammatory conditions, specifically in the preclinical stages of developing bromodomain and extra-terminal domain (BET) inhibitor compounds, with VYN201 as its initial candidate[36](index=36&type=chunk)[103](index=103&type=chunk) - The company announced on August 10, 2022, that its Phase 2a clinical trial for FMX114 in mild-to-moderate atopic dermatitis did not meet its primary endpoint, leading management to re-evaluate its pipeline and prioritization of activities[36](index=36&type=chunk)[103](index=103&type=chunk)[109](index=109&type=chunk) - On January 12, 2022, VYNE sold its MST franchise (including AMZEEQ, ZILXI, and FCD105) to Journey Medical Corporation for an upfront payment of **$20.0 million**, an additional **$5.0 million** on the one-year anniversary, and eligibility for up to **$450.0 million** in sales milestone payments[38](index=38&type=chunk)[39](index=39&type=chunk)[105](index=105&type=chunk)[106](index=106&type=chunk) - The company exercised an option with In4Derm Limited for exclusive worldwide rights to topical BET inhibitor compounds and expects to exercise an option for oral BET inhibitor compounds by February 28, 2023, with potential milestone payments up to **$43.75 million**[40](index=40&type=chunk)[41](index=41&type=chunk)[43](index=43&type=chunk)[44](index=44&type=chunk) - Following the divestiture of the MST Franchise, the company streamlined operations and reduced its workforce to approximately **28** employees, shifting focus to research and development[45](index=45&type=chunk)[107](index=107&type=chunk) - The company's ability to continue as a going concern is dependent on raising significant additional financing, as current cash and cash equivalents are not sufficient to fund operations beyond one year from the financial statements' issuance date, raising substantial doubt about its going concern status[52](index=52&type=chunk)[53](index=53&type=chunk)[138](index=138&type=chunk)[139](index=139&type=chunk)[140](index=140&type=chunk) [NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES](index=13&type=section&id=NOTE%202%20-%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines the key accounting principles and methods used in preparing the financial statements - The unaudited interim condensed consolidated financial statements are prepared in accordance with U.S. GAAP, with certain information condensed or omitted compared to annual audited statements[54](index=54&type=chunk)[55](index=55&type=chunk) - The company's revenue recognition policy follows ASC Topic 606, recognizing revenue when customers obtain control of products, and royalty revenues are recognized as products developed in collaboration are sold[61](index=61&type=chunk)[62](index=62&type=chunk)[65](index=65&type=chunk) - Due to the sale of the MST Franchise in January 2022, the company no longer generates product sales revenue, but continues to receive certain royalty revenues[61](index=61&type=chunk)[64](index=64&type=chunk) - The sale of the MST Franchise was classified as discontinued operations in accordance with ASC 205, reflecting a strategic shift with a major effect on the business[72](index=72&type=chunk)[73](index=73&type=chunk) - As a smaller reporting company, VYNE will adopt ASU 2016-13 (Credit Losses) effective January 1, 2023, but does not expect a material impact on its consolidated financial statements[74](index=74&type=chunk)[75](index=75&type=chunk) [NOTE 3 – DISCONTINUED OPERATIONS](index=17&type=section&id=NOTE%203%20%E2%80%93%20DISCONTINUED%20OPERATIONS) This note details the financial impact and accounting treatment of the MST Franchise divestiture - The MST Franchise was sold on January 12, 2022, and its results are classified as discontinued operations, recognizing a gain on sale upon closing[76](index=76&type=chunk) Income (Loss) from Discontinued Operations (in thousands) | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Product sales | $— | $3,963 | $106 | $7,852 | | Cost of goods sold | $— | $795 | $80 | $1,396 | | Total operating expenses | $241 | $12,407 | $(92) | $25,369 | | Net income (loss) from discontinued operations | $(241) | $(9,239) | $13,123 | $(18,913) | Gain on the Sale of the MST Franchise (Six Months Ended June 30, 2022) | Item (in thousands) | Amount | | :---------------------------- | :-------- | | Cash proceeds | $20,000 | | Proceeds to be paid in Jan 2023 | $5,000 | | Less transaction costs | $(4,247) | | Less book value of sold assets | $(7,748) | | Gain on sale, net of tax | $13,005 | - The company entered into a Transition Services Agreement (TSA) with Journey to provide transitional services into early 2023, with anticipated immaterial earnings[79](index=79&type=chunk) - Milestone payments for sales of ZILXI, AMZEEQ, and FCD105 are contingent consideration, accounted for as a gain contingency, and will be recognized when realizable[80](index=80&type=chunk) [NOTE 4 – SHARE CAPITAL](index=18&type=section&id=NOTE%204%20%E2%80%93%20SHARE%20CAPITAL) This note provides information on the company's authorized and outstanding share capital and related transactions - As of June 30, 2022, the company is authorized to issue **150,000,000** shares of common stock and **20,000,000** shares of preferred stock, with no preferred stock outstanding[81](index=81&type=chunk) - During the six months ended June 30, 2022, the company issued and sold **2,587,855** shares of common stock through an at-the-market (ATM) equity offering program for **$1.5 million** in net proceeds[87](index=87&type=chunk) - In March 2022, the company entered into an Equity Purchase Agreement with Lincoln Park Capital Fund, LLC, allowing it to sell up to **$30.0 million** of common stock over **36** months, and issued **1,667,593** commitment shares valued at **$0.9 million**[88](index=88&type=chunk) [NOTE 5 – SHARE BASED COMPENSATION](index=19&type=section&id=NOTE%205%20%E2%80%93%20SHARE%20BASED%20COMPENSATION) This note describes the company's stock-based compensation plans and related expenses - As of June 30, 2022, **961,559** shares remain issuable under the 2019 Equity Incentive Plan, **203,886** shares under the 2018 Omnibus Incentive Plan, and **2,165,534** shares under the Employee Share Purchase Plan (ESPP)[89](index=89&type=chunk)[91](index=91&type=chunk) - During the six months ended June 30, 2022, the company granted **777,003** options and **726,102** RSUs to employees and directors, with a fair value of **$0.8 million**, a significant decrease from **$7.5 million** in the prior year period[92](index=92&type=chunk)[93](index=93&type=chunk) Stock-Based Compensation Expense (in thousands) | Expense Category | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :----------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | R&D expenses | $393 | $442 | $622 | $900 | | SG&A | $770 | $1,070 | $1,786 | $2,672 | | Discontinued operations | $— | $389 | $(352) | $771 | | Total | $1,163 | $1,901 | $2,056 | $4,343 | [NOTE 6 – OPERATING LEASES](index=20&type=section&id=NOTE%206%20%E2%80%93%20OPERATING%20LEASES) This note details the company's operating lease arrangements and associated liabilities - As of June 30, 2022, the company has operating leases for corporate offices in Bridgewater, New Jersey, and Israel, with the principal executive office lease expiring on September 30, 2022[95](index=95&type=chunk)[96](index=96&type=chunk)[98](index=98&type=chunk) - The remaining lease liability for the principal executive office is **$31.0 thousand**, maturing on September 30, 2022[98](index=98&type=chunk) - A **$0.6 million** lien related to a letter of credit for lease agreements was released in April 2022, and the restricted cash was returned to the company[99](index=99&type=chunk) [NOTE 7 – COMMITMENTS AND CONTINGENCIES](index=21&type=section&id=NOTE%207%20%E2%80%93%20COMMITMENTS%20AND%20CONTINGENCIES) This note discloses the company's significant commitments and potential contingent liabilities - As of June 30, 2022, no legal proceedings or claims are pending against the company that management believes are likely to have a material adverse effect[100](index=100&type=chunk)[165](index=165&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses VYNE Therapeutics Inc.'s financial condition, operational results, strategic shifts, and liquidity challenges [Company Overview](index=22&type=section&id=Company%20Overview) This section provides an overview of VYNE Therapeutics' strategic focus, product development, and organizational changes - VYNE Therapeutics is a biopharmaceutical company focused on developing therapies for immuno-inflammatory conditions, with its initial BET inhibitor candidate, VYN201, in preclinical development[103](index=103&type=chunk) - The company divested its MST franchise, including AMZEEQ, ZILXI, and FCD105, to Journey Medical Corporation on January 12, 2022, for an upfront payment of **$20.0 million** and potential milestone payments up to **$450.0 million**[105](index=105&type=chunk)[106](index=106&type=chunk) - Following the divestiture, the company transitioned from a commercial organization to an R&D-focused entity, reducing its workforce from **106** to **28** employees[107](index=107&type=chunk) [Key Developments](index=22&type=section&id=Key%20Developments) This section highlights significant recent events impacting the company's product pipeline and strategic direction - On April 7, 2022, VYNE announced positive Phase 1b efficacy data for FMX114 in mild-to-moderate Atopic Dermatitis, showing a statistically significant reduction in disease severity[108](index=108&type=chunk) - On August 10, 2022, the Phase 2a clinical trial for FMX114 did not meet its primary endpoint, prompting management to re-evaluate the pipeline and prioritization of activities[109](index=109&type=chunk) [Financial Overview](index=23&type=section&id=Financial%20Overview) This section summarizes the company's financial performance and condition, including accumulated deficit and future viability - The company has incurred net losses since inception, with an accumulated deficit of **$643.3 million** as of June 30, 2022[110](index=110&type=chunk) - Net loss for the six months ended June 30, 2022, was **$3.8 million**, a significant improvement from **$40.5 million** in 2021, primarily due to **$13.1 million** income from discontinued operations[110](index=110&type=chunk) - Future viability depends on successfully executing its business strategy, developing product candidates, and raising additional capital, as failure to do so could negatively impact financial condition[111](index=111&type=chunk) [Components of Operating Results](index=23&type=section&id=Components%20of%20Operating%20Results) This section breaks down the various elements contributing to the company's operating performance, including revenues and expenses [Revenues](index=23&type=section&id=Revenues) This section details the company's revenue sources, primarily royalty revenue following the MST Franchise divestiture - Revenue for the periods presented consisted solely of royalty revenue, as product sales from AMZEEQ and ZILXI ceased after the MST Franchise divestiture on January 12, 2022[112](index=112&type=chunk)[113](index=113&type=chunk)[114](index=114&type=chunk) Royalty Revenues (in thousands) | Period | 2022 | 2021 | | :----- | :--- | :--- | | Six months ended June 30 | $304 | $525 | [Cost of Goods Sold](index=23&type=section&id=Cost%20of%20Goods%20Sold) This section explains the treatment of cost of goods sold, reclassified to discontinued operations after the MST Franchise sale - Cost of goods sold, previously related to AMZEEQ and ZILXI manufacturing, has been reclassified to discontinued operations for all periods presented following the MST Franchise sale[115](index=115&type=chunk)[116](index=116&type=chunk) [Research and Development Expenses](index=23&type=section&id=Research%20and%20Development%20Expenses) This section outlines the company's R&D expenditures, focusing on its immuno-inflammatory pipeline - R&D expenses primarily relate to the development of FMX114, VYN201, and VYN202, with all expenses charged to operations as incurred[116](index=116&type=chunk) - Following the MST Franchise sale, R&D expenses related to that franchise have been reclassified to discontinued operations, and current R&D is focused on the immuno-inflammatory pipeline[117](index=117&type=chunk) [Selling, General and Administrative Expenses](index=24&type=section&id=Selling%2C%20General%20and%20Administrative%20Expenses) This section describes the company's SG&A expenses, including employee-related costs and professional fees - SG&A expenses primarily include employee-related expenses, legal and professional fees, and facility costs[117](index=117&type=chunk) - SG&A expenses related to the MST Franchise have been reclassified to discontinued operations for all periods presented[117](index=117&type=chunk) [Interest expense](index=24&type=section&id=Interest%20expense) This section reports on interest expenses, noting their absence due to debt repayment - No interest expense was incurred during the three or six months ended June 30, 2022, due to the payment of all outstanding debt on August 11, 2021[118](index=118&type=chunk)[127](index=127&type=chunk)[133](index=133&type=chunk) [Other Expense, net](index=24&type=section&id=Other%20Expense%2C%20net) This section covers other non-operating income and expenses, primarily foreign exchange gains or losses - Other income (expense), net, primarily consists of foreign exchange gains or losses[119](index=119&type=chunk) [Income Taxes and Net Operating Loss Carryforwards](index=24&type=section&id=Income%20Taxes%20and%20Net%20Operating%20Loss%20Carryforwards) This section details the company's tax position, including net operating loss and tax credit carryforwards - As of December 31, 2021, the company had federal and state net operating loss (NOL) carryforwards of **$315.0 million** and **$105.6 million**, respectively, and federal and state R&D tax credit carryforwards of **$6.7 million** and **$1.2 million**[120](index=120&type=chunk) - NOLs and tax credit carryforwards are subject to limitations under Sections 382 or 383 of the Internal Revenue Code, which could limit their utilization against future taxable income[121](index=121&type=chunk)[122](index=122&type=chunk) [Results of Operations](index=25&type=section&id=Results%20of%20Operations) This section provides a comparative analysis of the company's financial performance over different periods [Comparison of the Three-Month Periods Ended June 30, 2022 and 2021](index=25&type=section&id=Comparison%20of%20the%20Three-Month%20Periods%20Ended%20June%2030%2C%202022%20and%202021) This section compares the company's financial results for the three months ended June 30, 2022, and 2021 Summary of Operations (Three Months Ended June 30, in thousands) | Metric | 2022 | 2021 | Variance ($) | Variance (%) | | :----- | :--- | :--- | :----------- | :----------- | | Total Revenues | $126 | $295 | $(169) | (57.3)% | | Research and development | $4,108 | $5,048 | $(940) | (18.6)% | | Selling, general and administrative | $4,305 | $4,789 | $(484) | (10.1)% | | Operating loss | $(8,287) | $(9,542) | $1,255 | (13.2)% | | Interest expense | $— | $(1,074) | $1,074 | (100.0)% | | Loss from discontinued operations | $(241) | $(9,239) | $8,998 | (97.4)% | | Net loss | $(8,476) | $(19,924) | $11,448 | (57.5)% | - Total revenues decreased by **57.3%** due to the divestiture of the minocycline business[123](index=123&type=chunk)[124](index=124&type=chunk) - Research and development expenses decreased by **18.6%** (**$0.9 million**), primarily due to reduced spending on FMX114 and employee-related expenses, partially offset by **$0.4 million** for extending the Oral BETi Option Term[123](index=123&type=chunk)[125](index=125&type=chunk) - Selling, general and administrative expenses decreased by **10.1%** (**$0.5 million**), mainly driven by lower employee-related expenses[123](index=123&type=chunk)[126](index=126&type=chunk) - Net loss significantly improved by **57.5%** (**$11.4 million**) due to the absence of interest expense and a substantial reduction in loss from discontinued operations[123](index=123&type=chunk)[127](index=127&type=chunk) [Comparison of the Six-Month Periods Ended June 30, 2022 and 2021](index=26&type=section&id=Comparison%20of%20the%20Six-Month%20Periods%20Ended%20June%2030%2C%202022%20and%202021) This section compares the company's financial results for the six months ended June 30, 2022, and 2021 Summary of Operations (Six Months Ended June 30, in thousands) | Metric | 2022 | 2021 | Variance ($) | Variance (%) | | :----- | :--- | :--- | :----------- | :----------- | | Total Revenues | $304 | $525 | $(221) | (42.1)% | | Research and development | $8,560 | $9,303 | $(743) | (8.0)% | | Selling, general and administrative | $8,722 | $10,521 | $(1,799) | (17.1)% | | Operating loss | $(16,978) | $(19,299) | $2,321 | (12.0)% | | Interest expense | $— | $(2,136) | $2,136 | (100.0)% | | Income (loss) from discontinued operations | $13,123 | $(18,913) | $32,036 | (169.4)% | | Net loss | $(3,806) | $(40,474) | $36,668 | (90.6)% | - Total revenues decreased by **42.1%** due to the divestiture of the minocycline business[129](index=129&type=chunk)[130](index=130&type=chunk) - Research and development expenses decreased by **8.0%** (**$0.7 million**), mainly due to lower compensation and reduced FMX114 spending, partially offset by increased VYN201 expenditures and the Oral BETi Option extension payment[129](index=129&type=chunk)[131](index=131&type=chunk) - Selling, general and administrative expenses decreased by **17.1%** (**$1.8 million**), primarily due to lower employee-related and consulting expenses[129](index=129&type=chunk)[132](index=132&type=chunk) - Net loss significantly improved by **90.6%** (**$36.7 million**), primarily driven by **$13.1 million** income from discontinued operations and the elimination of interest expense[129](index=129&type=chunk)[133](index=133&type=chunk)[134](index=134&type=chunk) [Liquidity and Capital Resources](index=27&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's cash position, funding sources, and future capital requirements - As of June 30, 2022, the company had **$42.8 million** in cash and cash equivalents and an accumulated deficit of **$643.3 million**[136](index=136&type=chunk) - The company received **$20.0 million** from the MST Franchise sale in January 2022 and expects an additional **$5.0 million** payment on the one-year anniversary[136](index=136&type=chunk) - The company's future viability and ability to continue as a going concern depend on raising sufficient working capital through debt or equity financings to fund operations and develop product candidates[138](index=138&type=chunk) - Management believes that without sufficient proceeds from financing or business development, the company will not have enough cash to fund operations beyond one year, raising substantial doubt about its ability to continue as a going concern[139](index=139&type=chunk)[140](index=140&type=chunk) [Summary Statement of Cash Flows](index=28&type=section&id=Summary%20Statement%20of%20Cash%20Flows) This section provides a high-level overview of cash flows from operating, investing, and financing activities Summary Statement of Cash Flows (Six Months Ended June 30, in thousands) | Cash Flow Activity | 2022 | 2021 | | :----------------- | :--- | :--- | | Operating activities | $(18,200) | $(28,808) | | Investing activities | $16,688 | $1,027 | | Financing activities | $1,471 | $73,374 | [Cash Used in Operating Activities](index=28&type=section&id=Cash%20Used%20in%20Operating%20Activities) This section details the cash outflows related to the company's core business operations - Net cash used in operating activities was **$18.2 million** for the six months ended June 30, 2022, primarily reflecting a net loss of **$3.8 million**, adjusted for a **$13.0 million** gain on the MST Franchise sale and **$2.1 million** in stock-based compensation[142](index=142&type=chunk) - This represents a decrease in cash used compared to **$28.8 million** in the prior year, which was driven by a higher net loss of **$40.5 million**[141](index=141&type=chunk)[143](index=143&type=chunk) [Cash Provided by Investing Activities](index=28&type=section&id=Cash%20Provided%20by%20Investing%20Activities) This section describes cash flows generated or used from investment activities, including asset sales - Net cash provided by investing activities was **$16.7 million** for the six months ended June 30, 2022, primarily from net proceeds from the disposition of the MST Franchise[144](index=144&type=chunk) - This is a significant increase from **$1.0 million** in the prior year, which was mainly from the sale and maturity of marketable securities and bank deposits[141](index=141&type=chunk)[144](index=144&type=chunk) [Cash Provided by Financing Activities](index=28&type=section&id=Cash%20Provided%20by%20Financing%20Activities) This section outlines cash flows related to debt, equity, and other financing transactions - Net cash provided by financing activities was **$1.5 million** for the six months ended June 30, 2022, primarily from the issuance of common stock[145](index=145&type=chunk) - This is a substantial decrease from **$73.4 million** in the prior year, which was also primarily attributable to common stock issuance[141](index=141&type=chunk)[145](index=145&type=chunk) [Cash and Funding Sources](index=28&type=section&id=Cash%20and%20Funding%20Sources) This section identifies the primary sources of liquidity for the company during the reporting period - Liquidity sources for the six months ended June 30, 2022, included proceeds from the MST Franchise sale and common stock issuance via an at-the-market offering[146](index=146&type=chunk) - In the prior year, liquidity was primarily from common stock issuance through ATM and registered direct offerings, and sales of AMZEEQ and ZILXI[147](index=147&type=chunk) [Funding Requirements](index=29&type=section&id=Funding%20Requirements) This section addresses the company's anticipated future capital needs and potential financing strategies - Future funding requirements depend on R&D costs for product candidates, regulatory approval timelines, terms of collaborations, new product identification, and intellectual property costs[148](index=148&type=chunk) - The company may need additional capital sooner than planned through equity, debt, or strategic collaborations, which could result in stockholder dilution or debt covenants[148](index=148&type=chunk) [Critical Accounting Policies, Significant Judgments and Use of Estimates](index=29&type=section&id=Critical%20Accounting%20Policies%2C%20Significant%20Judgments%20and%20Use%20of%20Estimates) This section discusses the key accounting policies and estimates that significantly impact the financial statements [Revenue Recognition](index=29&type=section&id=Revenue%20Recognition) This section explains the company's policy for recognizing revenue from contracts with customers and royalty agreements - Revenue is recorded based on a five-step model in accordance with ASC 606, involving identification of contracts, performance obligations, transaction price, allocation, and recognition upon satisfaction of obligations[153](index=153&type=chunk)[154](index=154&type=chunk) - Milestone payments are treated as variable consideration and included in the transaction price when it is probable that a significant reversal of cumulative revenue will not occur[155](index=155&type=chunk) [Discontinued Operations](index=30&type=section&id=Discontinued%20Operations) This section details the accounting treatment and impact of the MST Franchise divestiture on the financial statements - The sale of the MST Franchise was accounted for as discontinued operations under ASC 205 and ASU No. 2014-08, reflecting a strategic shift with a major effect on the business[156](index=156&type=chunk)[157](index=157&type=chunk) [Off-Balance Sheet Arrangements](index=30&type=section&id=Off-Balance%20Sheet%20Arrangements) This section confirms the absence of material off-balance sheet arrangements impacting the company's financial condition - The company is not party to any off-balance sheet arrangements that are reasonably likely to have a material current or future effect on its financial condition or results of operations[158](index=158&type=chunk) [JOBS Act Accounting Election](index=30&type=section&id=JOBS%20Act%20Accounting%20Election) This section clarifies the company's election regarding compliance with new accounting standards as an emerging growth company - As an 'emerging growth company,' VYNE has elected to 'opt out' of the extended transition period for complying with new or revised accounting standards, meaning it will comply as required when adopted[159](index=159&type=chunk) [Recently Issued and Adopted Accounting Pronouncements](index=30&type=section&id=Recently%20Issued%20and%20Adopted%20Accounting%20Pronouncements) This section refers to disclosures regarding new accounting standards and their expected impact - Information on recently adopted and newly issued accounting pronouncements and their expected impact is discussed in Note 2, 'Significant Accounting Policies,' of the unaudited interim condensed consolidated financial statements[160](index=160&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=31&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, VYNE Therapeutics Inc. is not required to provide quantitative and qualitative disclosures about market risk - VYNE Therapeutics Inc. is a smaller reporting company and is therefore not required to provide quantitative and qualitative disclosures about market risk[161](index=161&type=chunk) [Item 4. Controls and Procedures](index=31&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the evaluation of the company's disclosure controls and procedures and reports on any changes in internal control over financial reporting [Evaluation of Disclosure Controls and Procedures](index=31&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section assesses the effectiveness of the company's disclosure controls and procedures - As of June 30, 2022, management, with the participation of the CEO and CFO, concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level[162](index=162&type=chunk) [Changes in Internal Control over Financial Reporting](index=31&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) This section reports on any material changes in the company's internal control over financial reporting - There were no changes in internal controls over financial reporting during the six months ended June 30, 2022, that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[163](index=163&type=chunk) Part II – Other Information This section provides additional information including legal proceedings, risk factors, and exhibits [Item 1. Legal Proceedings](index=31&type=section&id=Item%201.%20Legal%20Proceedings) No pending legal proceedings or claims against the company are believed to have a material adverse effect as of June 30, 2022 - As of June 30, 2022, no legal proceedings or claims are pending against the company that, in management's opinion, are likely to have a material adverse effect[165](index=165&type=chunk) [Item 1A. Risk Factors](index=32&type=section&id=Item%201A.%20Risk%20Factors) This section updates risk factors, highlighting liquidity challenges and the critical need for additional funding to sustain operations - As of June 30, 2022, there have been no material changes to the risk factors from those disclosed in the Annual Report on Form 10-K, except for updated risks related to liquidity[166](index=166&type=chunk) - The company will need substantial additional funding to finance operations and may not be able to continue as a going concern, potentially forcing delays, reductions, or termination of R&D activities[167](index=167&type=chunk) - As of June 30, 2022, the company's cash and cash equivalents of **$42.8 million** are insufficient to fund anticipated operations for the next twelve months, raising substantial doubt about its ability to continue as a going concern[167](index=167&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=32&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section states that there were no unregistered sales of equity securities or use of proceeds to report - There were no unregistered sales of equity securities and use of proceeds to report[168](index=168&type=chunk) [Item 3. Defaults Upon Senior Securities](index=32&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section indicates that there were no defaults upon senior securities - There were no defaults upon senior securities[169](index=169&type=chunk) [Item 4. Mine Safety Disclosures](index=32&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section states that mine safety disclosures are not applicable to the company - Mine safety disclosures are not applicable[169](index=169&type=chunk) [Item 5. Other Information](index=32&type=section&id=Item%205.%20Other%20Information) This section indicates that there is no other information to report - There is no other information to report[170](index=170&type=chunk) [Item 6. Exhibits](index=32&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed or furnished as part of this Quarterly Report on Form 10-Q, including corporate documents and certifications - The report includes exhibits such as the Amended and Restated Certificate of Incorporation, Amended and Restated Bylaws, a Letter Agreement with In4Derm Limited, and certifications from the CEO and CFO[171](index=171&type=chunk) - XBRL Instance Document, Taxonomy Extension Schema, Calculation Linkbase, Definition Linkbase, and Label Linkbase Documents are also filed[171](index=171&type=chunk) SIGNATURES This section contains the required signatures for the Quarterly Report on Form 10-Q by the CEO and CFO of VYNE Therapeutics Inc [Signatures](index=35&type=section&id=Signatures) This section contains the required signatures for the Quarterly Report on Form 10-Q by the CEO and CFO of VYNE Therapeutics Inc - The report is signed by David Domzalski, President and Chief Executive Officer, and Tyler Zeronda, Chief Financial Officer and Treasurer, on August 12, 2022[176](index=176&type=chunk)[177](index=177&type=chunk)