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 March 31, 2026 (Form 10-Q).

Key Programs: Lead candidate GRI-0621 (oral inhibitor for fibrotic lung diseases like IPF) and GRI-0803 (oral agonist for autoimmune disorders like lupus and MS).

Corporate Actions: The company effected a 1-for-28 reverse stock split on January 23, 2026. All share and per-share data in this filing reflect this adjustment.

Key Financial Metrics

Note: The filing does not provide a clear value for Q1 2025 Total Assets or Liabilities in the comparative table, only the current period balance sheet is fully detailed in the text provided.

Material Changes vs. Prior Period

• Net Loss Reduction: Net loss decreased by approximately $1.0 million (34%) compared to Q1 2025, primarily driven by a $1.2 million decrease in Research and Development (R&D) expenses.
• R&D Expenses: Dropped from $1.64 million to $0.36 million. This decrease is attributed to the completion of the Phase 2a clinical trial for GRI-0621 and reduced consulting fees.
• G&A Expenses: Increased from $1.41 million to $1.64 million, driven by a $0.4 million rise in public company expenses, partially offset by lower personnel costs.
• Liquidity Position: Cash balances increased significantly from $3.28 million in Q1 2025 to $11.05 million in Q1 2026, fueled by financing activities.
• Capital Raise: The company raised $6.82 million in gross proceeds during Q1 2026 via its At-The-Market (ATM) facility, selling 1,087,364 shares at a weighted average price of $6.27.

Guidance, Outlook, and Risks

• Clinical Outlook: The Phase 2a trial for GRI-0621 met its primary endpoint (safety/tolerability) and secondary endpoints. Management plans to initiate a Phase 2b trial, potentially as a registrational trial in the U.S. or for conditional approval in the EU, subject to FDA clearance and funding.
• 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 issuance date. Current cash ($11.0 million) is projected to fund operations into Q2 2027, but only if the company limits activities to preliminary work for the Phase 2b trial. Completing the full Phase 2b trial requires substantial additional capital.
• Financing Strategy: The company intends to raise capital through equity issuances, debt, or strategic partnerships. The ATM facility capacity was increased to $60.0 million in January 2026.
• Internal Controls: Management concluded that disclosure controls and procedures were not effective as of March 31, 2026, due to a material weakness related to accounting software limitations and insufficient segregation of duties. Remediation efforts are underway.
• Risk Factors: No material changes to risk factors were disclosed from the previous Annual Report.

Investor Verification Checklist

• Cash Runway: Verify the specific burn rate assumptions used to project cash sufficiency into Q2 2027, particularly the distinction between "preliminary work" and full Phase 2b trial costs.
• ATM Facility Status: Confirm the remaining capacity under the expanded $60.0 million ATM facility and the current market price relative to the recent weighted average sale price of $6.27.
• Internal Control Remediation: Monitor the timeline and effectiveness of the new compensating controls designed to address the material weakness in financial reporting.
• Phase 2b Trial Design: Review future communications regarding the specific design, cost, and regulatory feedback for the planned Phase 2b trial of GRI-0621.
• Warrant Liability: Assess the potential dilution from outstanding warrants (approx. 518,574 shares) and their exercise prices relative to current trading levels.