GRI

Business Context and Reporting Period

Company: GRI Bio, Inc. (GRI), a clinical-stage biopharmaceutical company focused on therapies for inflammatory, fibrotic, and autoimmune disorders.

Reporting Period: Quarterly period ended September 30, 2025 (2025 Q3).

Key Programs: Lead candidate GRI-0621 (oral inhibitor for idiopathic pulmonary fibrosis) is in a Phase 2a biomarker study with topline results expected by November 2025. Secondary candidate GRI-0803 (autoimmune disorders) development is limited pending additional funding.

Corporate Status: Smaller reporting company and emerging growth company. The company has incurred operating losses since inception and has an accumulated deficit of $49.0 million as of September 30, 2025.

Key Financial Metrics

Debt: No senior debt reported. Liabilities consist primarily of accounts payable ($1.3M), accrued expenses ($1.4M), and operating lease liabilities ($0.1M).

Material Changes vs. Prior Period

• Increased Burn Rate: Net loss for the nine months ended September 30, 2025, increased by $3.0 million (48%) compared to the same period in 2024, driven by higher operating expenses.
• R&D Expenses: Increased by $2.3 million (81%) year-over-year for the nine-month period, primarily due to $2.1 million in additional costs for the GRI-0621 development program.
• G&A Expenses: Increased by $0.7 million (21%) year-over-year, largely due to higher personnel and stock-based compensation costs.
• Capital Raises: The company raised approximately $7.6 million in net proceeds during the first nine months of 2025 through an April 2025 public offering ($4.0M) and At-The-Market (ATM) sales ($2.5M).
• Share Count: Outstanding shares increased significantly from 525,485 at year-end 2024 to 3,268,727 as of September 30, 2025, due to equity issuances and reverse stock splits.

Outlook, Risks, and Management Commentary

• Liquidity and Going Concern: Management states there is substantial doubt about the company's ability to continue as a going concern for one year from the filing date. Current cash ($4.1M) is projected to fund operations only into the first quarter of 2026.
• Financing Needs: The company intends to raise additional capital through equity or debt but notes no assurance that financing will be available on acceptable terms. Failure to secure funding could force reductions in operations or program delays.
• Internal Controls: Management identified a material weakness in internal controls related to the inaccurate computation of a non-cash deemed dividend associated with the re-pricing of Series B Common Warrants. Remediation plans are underway.
• Clinical Milestones: Topline results for the GRI-0621 Phase 2a biomarker study are expected by the end of November 2025. Development of GRI-0803 is paused pending funding.

Investor Verification Checklist

• Cash Runway: Verify the sufficiency of the $4.1M cash balance to fund operations through Q1 2026 and the timeline for the next capital raise.
• Internal Control Remediation: Monitor progress on fixing the material weakness regarding warrant re-pricing accounting to ensure future financial statement reliability.
• Dilution Risk: Assess the impact of the significant increase in share count (from ~0.5M to ~3.3M) and outstanding warrants on future equity value.
• Clinical Data: Await the November 2025 topline data for GRI-0621 to validate the anti-fibrotic efficacy and safety profile.
• Deemed Dividend: Review the accounting treatment of the $1.5M deemed dividend recorded in the October 2024 warrant repricing transaction.