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STOCKHOLDERS' EQUITY | 6 Months Ended
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Jun. 30, 2026
Equity [Abstract] |
STOCKHOLDERS' EQUITY | STOCKHOLDERS' EQUITY Common Stock The Company had 200,000,000 shares of common stock authorized as of June 30, 2026 and December 31, 2025, of which 5,306,894 and 5,283,321 shares were issued and outstanding as of June 30, 2026 and December 31, 2025, respectively. Preferred Stock The Company had 50,000,000 shares of preferred stock authorized as of June 30, 2026 and December 31, 2025, of which no shares were issued or outstanding as of June 30, 2026 and December 31, 2025. Pre-Funded Warrants In connection with a follow-on offering, the Company entered into an agreement with certain investors to issue pre-funded warrants in lieu of common stock to purchase up to an aggregate of 416,673 shares of common stock at a price of $47.9992, which represents the per share public offering price of the November 2022 follow-on offering for common stock less a $0.0008 per share exercise price for each pre-funded warrant. The Company may not effect the exercise of any pre-funded warrant, and a holder will not be entitled to exercise any portion of any pre-funded warrant if, upon giving effect to such exercise, the aggregate number of shares of common stock beneficially owned by the holder (together with its affiliates) would exceed 9.99% of the number of shares of common stock outstanding immediately after giving effect to the exercise, which percentage may be increased or decreased at the holder’s election upon 61 days’ notice to the Company subject to the terms of such pre-funded warrants, provided that such percentage may in no event exceed 19.99%. The Company's pre-funded warrant is a freestanding instrument that does not meet the definition of a liability pursuant to ASC 480, Distinguishing Liabilities from Equity ("ASC 480"), and does not meet the definition of a derivative pursuant to ASC 815, Derivatives and Hedging ("ASC 815"). The pre-funded warrant is indexed to the Company’s common stock and meets all other conditions for equity classification under ASC 480 and ASC 815. Accordingly, the pre-funded warrant was classified as equity and accounted for as a component of additional paid-in capital at the time of issuance. All of the pre-funded warrants related to the November 2022 follow-on offering remain outstanding and unexercised as of June 30, 2026. Share-based Compensation Share-based compensation is comprised of the Company's stock options, restricted stock awards, restricted stock units and shares issued pursuant to the employee stock purchase plan, and is classified in the condensed consolidated statements of operations and comprehensive income (loss) for the three and six months ended June 30, 2026 and 2025 was as follows:
| FOR THE THREE MONTHS ENDED JUNE 30, |  | FOR THE SIX MONTHS ENDED JUNE 30, |  |
(in thousands) | 2026 |  | 2025 |  | 2026 |  | 2025 |  |  |  |
Research and development | $ | 35 |  |  | $ | 618 |  |  | $ | 219 |  |  | $ | 1,428 |  |  |  |  |
General and administrative | 389 |  |  | 996 |  |  | 818 |  |  | 2,065 |  |  |  |  |
| $ | 424 |  |  | $ | 1,614 |  |  | $ | 1,037 |  |  | $ | 3,493 |  |  |  |  |
2021 Equity Incentive Plan In 2021, the board of directors adopted the Rallybio Corporation 2021 Equity Incentive Plan (the "2021 Plan"). The 2021 Plan initially reserved 680,043 shares of the Company's common stock that have been issued in respect of outstanding equity awards granted prior to the Company's initial public offering ("IPO"), and for future issuances of shares to employees, directors and consultants in the form of stock options, SARs, restricted and unrestricted stock and stock units, performance awards and other awards that are convertible into or otherwise based on the Company's common stock. Dividend equivalents may also be provided in connection with awards under the 2021 Plan. The share pool will automatically increase on January 1st of each year until 2031, by the lesser of (i) five percent of the number of shares of the Company's common stock outstanding as of such date and (ii) the number of shares of the Company's common stock determined by the board of directors on or prior to such date. On January 1, 2026 and January 1, 2025, the 2021 Plan share pool was automatically increased by 264,166 and 259,438 shares, respectively. As of June 30, 2026, the total number of shares of the Company's common stock that were issuable under the 2021 Plan was 1,501,008 shares, of which 846,407 shares remained available for future issuance. The following table summarizes stock option activity for the six months ended June 30, 2026:
Stock Options |  | Number of Option Shares |  | Weighted-Average Exercise Price |  | Weighted-Average Contractual Term (in years) |  | Aggregate Intrinsic Value (in thousands)
Outstanding stock options at December 31, 2025 |  | 628,280 |  | $ | 43.42 |  |  | 7.6 |  | $89
Granted |  | 32,360 |  | $ | 4.45 |  |  |  |  |
Forfeited |  | (11,404) |  | $ | 15.70 |  |  |  |  |
Expired |  | (13,317) |  | $ | 93.52 |  |  |  |  |
Exercised |  | (14,087) |  | $ | 8.56 |  |  |  |  |
Outstanding stock options at June 30, 2026 |  | 621,832 |  | $ | 41.62 |  |  | 3.1 |  | $2,348
Exercisable stock options at June 30, 2026 |  | 456,345 |  | $ | 51.43 |  |  | 2.6 |  | $1,260
The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock options and the estimated fair value of the Company's common stock. Stock options outstanding with an exercise price below the closing price as of June 30, 2026 had an intrinsic value of approximately $2.3 million. Stock options outstanding and exercisable with an exercise price below the closing price as of June 30, 2026 had an intrinsic value of $1.3 million. These values are based on a common stock fair value of $16.00 per share, which was the closing price of the Company's common stock on June 30, 2026. Using the Black-Scholes option pricing model, the weighted-average grant date fair value of stock options granted during the six months ended June 30, 2026 and 2025 was $3.60 per share and $4.96 per share, respectively. As of June 30, 2026, there was unrecognized share-based compensation expense related to nonvested stock options of $1.8 million, which the Company expects to recognize over a weighted-average period of approximately 1.7 years. As of June 30, 2026, in connection with the proposed Merger, all nonvested stock options are expected to vest and the remaining expense will be recognized on the date of the Closing. The fair value of the stock options granted during the six months ended June 30, 2026 and 2025 was determined using the Black-Scholes option pricing model with the following assumptions:
|  | FOR THE SIX MONTHS ENDED JUNE 30,
|  | 2026 |  | 2025
Expected volatility |  | 109.21% |  | 91.88% - 119.61%
Expected term (years) |  | 5.25 |  | 5.27 - 6.02
Risk free interest rate |  | 3.68% |  | 4.03% - 4.39%
Expected dividend yield |  | — |  | —
Exercise price |  | $4.45 |  | $2.40 - $7.60
A summary of the status of the Company's nonvested restricted common stock units at June 30, 2026 and changes during the six months ended June 30, 2026 was as follows:
Restricted Stock Units |  | Shares |  | Weighted-Average Grant Date Fair Value Per Share
Nonvested restricted stock units at December 31, 2025 |  | 38,603 |  | $ | 9.60 |
Granted |  | 5,000 |  | $ | 4.45 |
Forfeited |  | (4,150) |  | $ | 2.40 |
Vested |  | (6,684) |  | $ | 9.53 |
Nonvested restricted stock units at June 30, 2026 |  | 32,769 |  | $ | 9.74 |
As of June 30, 2026, there was unrecognized share-based compensation expense related to nonvested restricted stock units of $0.2 million, which the Company expects to recognize over a weighted-average period of approximately 1.9 years. As of June 30, 2026, in connection with the proposed Merger, all nonvested restricted stock units are expected to vest and the remaining expense will be recognized on the Closing Date. 2021 Employee Stock Purchase Plan In connection with the Company's IPO, the board of directors adopted the Rallybio Corporation 2021 Employee Stock Purchase Plan (the "2021 ESPP"), which initially reserved 36,415 shares of the Company's common stock for future issuances under this plan. The share pool will automatically increase on January 1st of each year from 2022 to 2031, by the lesser of (i) one percent of the number of shares of the Company's common stock outstanding as of such date, (ii) 72,831 shares of the Company’s common stock and (iii) the number of shares of the Company's common stock determined by the board of directors on or prior to such date. The 2021 ESPP share pool did not increase on January 1, 2026 or January 1, 2025. As of June 30, 2026, the total number of shares of the Company's common stock available for future issuance under the 2021 ESPP was 91,479 shares. During the six months ended June 30, 2026 and 2025, the Company issued 2,802 and 4,375, respectively, of the Company's common stock under the 2021 ESPP. The 2021 ESPP allows eligible participants to purchase shares of the Company's common stock through authorized payroll deductions. The purchase price of the shares will not be less than 85% of the lower of the fair market value of the Company's common stock on the first day of an offering or on the date of the purchase.

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