GRI Bio, Inc. — Q1 2024 Form 10-Q
Reporting period: Three months ended March 31, 2024. GRI Bio is a clinical-stage biopharmaceutical company developing immune-targeting therapies, including GRI-0621 for idiopathic pulmonary fibrosis (IPF) and GRI-0803 for autoimmune disorders. It reported no significant operating revenue and does not expect product revenue unless candidates are developed, approved, and commercialized.
Financial performance and position
Dollar amounts below are in thousands unless otherwise noted.
| Metric | Q1 2024 | Q1 2023 / prior date |
|---|---|---|
| Revenue | No significant operating revenue | No significant operating revenue |
| Research and development expense | $933 | $116 |
| General and administrative expense | $962 | $872 |
| Total operating expenses / operating loss | $1,895 / $(1,895) | $988 / $(988) |
| Net loss | $(1,887) | $(2,150) |
| Net loss per share, basic and diluted | $(0.46) | $(15.04) |
| Cash used in operating activities | $(2,203) | $(579) |
| Cash and cash equivalents | $4,091 at March 31, 2024 | $1,808 at December 31, 2023 |
| Total assets / total liabilities | $4,587 / $1,789 | $2,956 / $2,697 at December 31, 2023 |
| Stockholders’ equity | $2,798 | $259 at December 31, 2023 |
Margins are not meaningful because the company has no significant revenue. No material debt balance is reported at March 31, 2024. Current liabilities were $1,680, including accounts payable of $637 and accrued expenses of $999; lease liabilities totaled $152. The warrant liability was $1.
Changes and financing
- R&D expense rose $817 year over year, primarily due to increased GRI-0621 development spending, consulting, and personnel costs. G&A increased $90, with higher personnel, administrative, and insurance costs partly offset by lower consulting and professional fees.
- Net loss narrowed by $263, mainly because Q1 2023 included $1,162 of interest expense from amortization of debt discounts and issuance costs on Bridge Notes. Q1 2024 reported $6 of net interest income and a $2 gain from the decrease in warrant liability fair value.
- Operating cash use increased to $2,203 from $579. Financing provided $4,486, principally from the February 2024 offering; cash increased by $2,283 during the quarter.
- The February offering generated $5,500 gross proceeds through common shares and pre-funded warrants, with the filing reporting net proceeds of approximately $4,389 after offering expenses. The cash flow statement reports $1,014 of stock issuance-cost payments, while the offering disclosure reports $1,110 of offering costs.
- Shares outstanding were 3,196,488 at March 31 and 3,774,488 as of May 6, 2024. The company also had substantial potential dilution: 10,298,553 warrants were excluded from diluted EPS as antidilutive at quarter end.
Outlook, risks, and other matters
- Management expects interim data from the GRI-0621 Phase 2a IPF biomarker study in Q3 2024 and topline results in Q4 2024. Enrollment began in December 2023. The company expects to file an IND for GRI-0803 in the second half of 2024, subject to IND clearance.
- Based on its current operating plan, the company expects its March 31 cash to fund operating expenses and capital expenditures into Q3 2024. It expects significant additional funding will be required and states there is substantial doubt about its ability to continue as a going concern for one year after issuance of the financial statements. Failure to obtain financing could force spending reductions, delays or cancellations of programs, asset sales, or cessation of operations.
- Nasdaq had notified the company of deficiencies in stockholders’ equity and minimum bid price. The company reported that its $5.5 million gross offering fell short of Nasdaq’s required $6.0 million equity-offering amount and might not sustain compliance, and that it had not regained bid-price compliance following the reverse stock split. Failure to meet Nasdaq requirements could result in delisting.
- The filing reports no material legal proceedings and no material changes to previously disclosed risk factors. Management concluded disclosure controls were effective; no material change in internal control over financial reporting was reported.
Important facts for investors to verify
- Cash runway and the timing, amount, and terms of additional financing, including any subsequent financing or changes to the going-concern assessment.
- Nasdaq compliance status, including satisfaction of the equity and minimum-bid-price requirements and any delisting notices or extensions.
- Progress and timing of the GRI-0621 Phase 2a study and GRI-0803 IND plans, including any changes to anticipated data dates.
- Potential dilution from outstanding pre-funded and common warrants, warrant exercises, and subsequent changes in shares outstanding.
- The offering-cost figures: the filing gives approximately $4,389 of net proceeds after $1,110 of costs, while the cash flow statement shows $1,014 of stock issuance-cost payments.