GRI

Business Context and Reporting Period

Company: GRI Bio, Inc. (GRI)
Filing Type: Form 10-K (Annual Report)
Reporting Period: Fiscal year ended December 31, 2025
Business Overview: GRI Bio is a clinical-stage biopharmaceutical company developing therapies targeting dysregulated immune responses in inflammatory, fibrotic, and autoimmune disorders. The company has no approved products and generates no revenue. Its primary focus is the development of GRI-0621 (an oral inhibitor of iNKT cells) for Idiopathic Pulmonary Fibrosis (IPF) and GRI-0803 (an agonist of dNKT cells) for autoimmune disorders like Systemic Lupus Erythematosus (SLE).

Key Financial Metrics

Note: All figures in millions unless otherwise noted. The company has no debt obligations listed in the balance sheet liabilities.

Material Changes vs. Prior Period

• Increased Burn Rate: Net loss increased by approximately 46% year-over-year, driven primarily by a $3.05 million increase in R&D expenses related to the GRI-0621 registration development program.
• Capital Raises: The company raised significant capital in 2025 through multiple public offerings (April and December 2025) and an At-The-Market (ATM) facility, resulting in a net cash increase of $3.2 million for the year.
• Reverse Stock Split: A 1-for-28 reverse stock split was effected on January 23, 2026, to maintain Nasdaq listing compliance. All share data in the filing has been retroactively adjusted.
• Auditor Change: The company dismissed Sadler Gibb & Associates LLC and appointed WithumSmith+Brown, PC as its independent auditor in April 2025.

Guidance, Outlook, and Risks

Management Commentary and Outlook

• Phase 2a Results: The company reported topline data from a Phase 2a trial of GRI-0621 in IPF patients. The trial met its primary safety endpoint and secondary endpoints measured to date, showing suggestive anti-fibrotic effects and improved lung function (FVC) in the treatment arm compared to placebo.
• Future Trials: Management plans to initiate a Phase 2b trial for GRI-0621, which could support conditional approval in the EU and potentially serve as a registrational trial in the US. An IND for GRI-0803 is targeted for filing in 2026.
• Liquidity Runway: Management believes existing cash ($8.2 million) is sufficient to fund operations into the first quarter of 2027. However, this estimate assumes only preliminary work for the Phase 2b trial; completing the trial will require substantial additional capital.

Risks and Contingencies

• Going Concern: The independent auditor has included an explanatory paragraph regarding substantial doubt about the company's ability to continue as a going concern due to recurring losses and the need for additional financing.
• Internal Controls: Management identified a material weakness in internal controls over financial reporting as of December 31, 2025, related to insufficient segregation of duties due to limited accounting personnel and software limitations. A prior material weakness regarding warrant accounting was remediated.
• Nasdaq Compliance: The company received notice of non-compliance with Nasdaq's Stockholders' Equity Requirement but has conditionally complied pending future reporting. Continued compliance with the Minimum Bid Price Rule remains a risk.
• Capital Requirements: Failure to secure additional funding could force the company to delay, reduce, or eliminate development programs or cease operations entirely.

Investor Verification Checklist

• Cash Runway Validation: Verify if the $8.2 million cash balance is sufficient to cover the specific costs of the planned Phase 2b trial, as management explicitly states current funds do not cover the full trial.
• Phase 2a Data Finalization: Confirm the final, audited data from the GRI-0621 Phase 2a trial, as topline data is subject to change upon full analysis and audit.
• Internal Control Remediation: Monitor the company's progress in addressing the material weakness regarding segregation of duties, which could impact the reliability of future financial reporting.
• Nasdaq Listing Status: Track the company's stock price and equity levels to ensure continued compliance with Nasdaq listing requirements following the reverse stock split.
• Dilution Impact: Assess the dilution effect of the numerous outstanding warrants (Series B through F) and options, which represent a significant portion of the potential share count.