What changed in this filing

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Item 1. Financial Statements

2025-05-15 compared with 2024-11-14 · 143 added, 253 removed, 199 unchanged (67% of the section changed)

3 unchanged sentences

(in thousands, except share and per share amounts)

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Assets (unaudited)

10 unchanged sentences

Accrued expenses 1,368 691

Warrant liability — 3

Operating lease liabilities, current 50 48

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Commitments and contingencies (Note 9)

Stockholders' equity (deficit):

Stockholders' equity:

Common stock, 0.0001 par value;

250,000,000 shares authorized as of September 30, 2024 and December 31, 2023;

5,022,901 and 49,663 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively

250,000,000 shares authorized as of March 31, 2025 and December 31, 2024;

525,358 and 525,485 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively

Additional paid-in capital

43,991 43,772

Accumulated deficit ( 42,786 ) ( 39,740 )

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(in thousands, except share and per share amounts)

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Three Months Ended March 31,

Operating expenses:

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Change in fair value of warrant liability — 2

Other income — 250 — 250

Interest income (expense), net 7 6 19 ( 2,089 )

Interest income

Net loss $ ( 3,046 ) $ ( 1,887 )

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GRI Bio, Inc.

Consolidated Statements of Changes in Stockholders’ Equity (Deficit)

Consolidated Statements of Changes in Stockholders’ Equity

(in thousands, except shares)

Common Stock Additional Paid-in Capital Accumulated Deficit Stockholders’ Equity (Deficit)

Three Months Ended March 31, 2025

Common Stock Additional

Paid-in Capital

Accumulated Deficit Stockholders’ Equity

Balance, December 31, 2024 525,485 $ — $ 43,772 $ ( 39,740 ) $ 4,032

Stock-based compensation — — 220 — 220

Restricted stock vesting 5 — — — —

Warrant issuance — — 532 — 532

Net loss — — — ( 2,150 ) ( 2,150 )

Balance, March 31, 2023 10,992 $ — $ 17,416 $ ( 20,646 ) $ ( 3,230 )

Stock-based compensation — — 13 — 13

Restricted stock vesting 1,802 — — — —

Warrant exercise 480 — 12 — 12

Issuance of common stock in pre-closing financing 13,350 — 11,721 — 11,721

Issuance of common stock for settlement of bridge note 596 — 3,333 — 3,333

Issuance of common stock for reverse recapitalization expenses 335 — 1,875 — 1,875

Issuance of common stock to Vallon stockholders in reverse recapitalization 4,930 — ( 2,940 ) — ( 2,940 )

Net loss — — — ( 6,746 ) ( 6,746 )

Balance, June 30, 2023 32,485 $ — $ 31,430 $ ( 27,392 ) $ 4,038

Stock-based compensation — — 326 — 326

Fractional share adjustment ( 127 ) — ( 1 ) — ( 1 )

Net loss — — — ( 3,046 ) ( 3,046 )

Balance, September 30, 2023 32,485 $ — $ 31,756 $ ( 29,529 ) $ 2,227

Common Stock Additional Paid-in Capital Accumulated Deficit Stockholders’ Equity

Balance, March 31, 2025 (unaudited)

525,358 $ — $ 43,991 $ ( 42,786 ) $ 1,205

Three Months Ended March 31, 2024

Common Stock Additional

Paid-in Capital

Accumulated Deficit Stockholders’ Equity

Balance, December 31, 2023 2,909 $ — $ 31,792 $ ( 31,533 ) $ 259

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Net loss — — — ( 1,887 ) ( 1,887 )

Balance, March 31, 2024 245,875 $ — $ 36,218 $ ( 33,420 ) $ 2,798

Stock-based compensation — — 37 — 37

Fractional share adjustment ( 187 ) — — — —

Issuance of common stock 353,892 — 4,134 — 4,134

Prefunded warrant exercise 202,334 — — — —

Net loss — — — ( 2,250 ) ( 2,250 )

Balance, June 30, 2024 801,914 $ — $ 40,389 $ ( 35,670 ) $ 4,719

Stock-based compensation — — 37 — 37

Issuance of common stock 2,093,404 — 1,027 — 1,027

Warrant exercise 2,127,583 — — — —

Net loss — — — ( 2,123 ) ( 2,123 )

Balance, September 30, 2024 5,022,901 $ — $ 41,453 $ ( 37,793 ) $ 3,660

Balance, March 31, 2024 (unaudited)

14,450 $ — $ 36,218 $ ( 33,420 ) $ 2,798

See accompanying notes to unaudited interim consolidated financial statements.

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(in thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

Operating activities:

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Depreciation expense 1 1

Amortization of debt discounts and issuance costs — 2,104

Stock-based compensation expense 220 37

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Cash used in operating activities ( 1,736 ) ( 2,203 )

Investing activities:

Purchase of property and equipment — ( 8 )

Cash used in investing activities — ( 8 )

Financing activities:

Advances from employees — 190

Repayment of advances from employees — ( 195 )

Proceeds from issuance of bridge promissory note — 1,250

Proceeds from issuance of common stock in financing transactions — 5,500

Proceeds from issuance of common stock under ATM facility 1,988 —

Proceeds from warrant exercise 1 12

Payment for fractional shares in connection with reverse stock split ( 1 ) —

Net liabilities assumed in connection with reverse recapitalization — ( 2,939 )

Payment of reverse recapitalization costs — ( 2,984 )

Payment of deferred stock issuance costs ( 10 ) ( 1,014 )

Payment of debt issuance costs — ( 150 )

Cash provided by financing activities 9,550 6,917

Net increase in cash and cash equivalents 2,938 3,479

Cash (used in) provided by financing activities ( 11 ) 4,486

Net (decrease) increase in cash and cash equivalents ( 1,747 ) 2,283

Cash and cash equivalents at beginning of period 5,028 1,808

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Supplemental disclosure of non-cash financing activities:

Issuance of stock for repayment of bridge promissory note $ — $ 3,333

Recognition of debt discount and additional paid-in-capital for issuance of warrants in connection with the

issuance of promissory notes $ — $ 532

Issuance of stock for payment of reverse recapitalization costs $ — $ 1,875

Issuance of warrants for payment of stock issuance costs $ — $ 18

Merger costs included in accounts payable $ — $ 72

Recognition of right-of-use assets and lease liabilities $ — $ 152

Deferred stock issuance costs in accounts payable and accrued expenses $ 247 $ 97

See accompanying notes to unaudited interim consolidated financial statements.

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The Company’s goal is to be an industry leader in developing therapies to treat these diseases and to improve the lives of patients suffering from such diseases.

The Company’s lead product candidate, GRI-0621, is an oral inhibitor of type 1 Natural Killer T cells and is being developed for the treatment of severe fibrotic lung diseases such as idiopathic pulmonary fibrosis (IPF).

The Company’s lead product candidate, GRI-0621, is an oral inhibitor of type 1 invariant Natural Killer T (iNKT) cells and is being developed for the treatment of severe fibrotic lung diseases such as idiopathic pulmonary fibrosis (IPF).

The Company’s product candidate portfolio also includes GRI-0803 and a proprietary library of 500+ compounds.

GRI-0803, the lead molecule selected from the library, is a novel oral agonist of type 2 Natural Killer T cells and is being developed for the treatment of autoimmune disorders, with much of its preclinical work in Systemic Lupus Erythematosus Disease (SLE) or lupus and multiple sclerosis (MS).

Reverse Merger with Vallon Pharmaceuticals, Inc.

On April 21, 2023, pursuant to an Agreement and Plan of Merger, dated as of December 13, 2022, as amended on February 17, 2023 (the Merger Agreement), by and among the Company, GRI Bio Operations, Inc., formerly known as GRI Bio, Inc.

(GRI Operations), and Vallon Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of the Company (Merger Sub), Merger Sub was merged with and into GRI Operations (the Merger), with GRI Operations surviving the Merger as a wholly owned subsidiary of the Company (Note 4).

In connection with the closing of the Merger (the Closing), the Company amended its certificate of incorporation and amended its bylaws to change its name from “Vallon Pharmaceuticals, Inc.” to “GRI Bio, Inc.”

GRI-0803, the lead molecule selected from the library, is a novel oral agonist of type 2 diverse Natural Killer T (dNKT) cells and is being developed for the treatment of autoimmune disorders, with much of its preclinical work in Systemic Lupus Erythematosus Disease (SLE) or lupus and multiple sclerosis (MS).

Recapitalization

In connection with the Merger, and immediately prior to the effective time of the Merger (the Effective Time), the Company effected a reverse stock split of its common stock, par value $ 0.0001 (Common Stock), at a ratio of one-for-thirty (the April 2023 Reverse Stock Split).

On January 29, 2024, the Company effected a reverse stock split of its Common Stock at a ratio of one-for-seven (the January 2024 Reverse Stock Split).

On June 17, 2024, the Company effected a reverse stock split of its Common Stock at a ratio of one-for-thirteen (the June 2024 Reverse Stock Split and together with the April 2023 Reverse Stock Split and the January 2024 Reverse Stock Split, the Reverse Stock Splits).

On June 17, 2024, the Company effected a reverse stock split of its Common Stock at a ratio of one-for-thirteen (the June 2024 Reverse Stock Split).

On February 21, 2025, the Company effected a reverse stock split of its Common Stock at a ratio of one-for-seventeen (the February 2025 Reverse Stock Split and together with the January 2024 Reverse Stock Split and the June 2024 Reverse Stock Split, the Reverse Stock Splits).

Unless otherwise noted, all references to share and per share amounts in these consolidated financial statements reflect the Reverse Stock Splits.

Basis of Presentation

As discussed in Note 4, the Merger was accounted for as reverse recapitalization under which the historical financial statements of the Company prior to the Merger are the historical financial statements of the accounting acquirer, GRI Operations.

All Common Stock, per share and related information presented in the consolidated financial statements and notes prior to the Merger has been retroactively adjusted to reflect the Exchange Ratio (as defined below) and the Reverse Stock Splits for all periods presented, to the extent applicable.

These unaudited interim consolidated financial statements have been prepared on the basis that the Company is a going concern, which contemplates, among other things, the realization of assets and the satisfaction of liabilities in the normal course of business.

The Company has not generated any significant revenues from operations since inception and does not expect to do so in the foreseeable future.

The Company has incurred operating losses since its inception in 2009 and as a result has incurred $ 37,793 in accumulated deficit through September 30, 2024.

The Company has incurred operating losses since its inception in 2009 and as a result has incurred $ 42,786 in accumulated deficit through March 31, 2025.

The Company has financed its working capital requirements to date through the issuance of equity and debt securities.

As of September 30, 2024, the Company had cash of approximately $ 4,746 .

In connection with signing the Merger Agreement, the Company, GRI Operations and Altium Growth Fund, LP (Altium) entered into a Securities Purchase Agreement, dated December 13, 2022 (the Equity SPA), pursuant to which Altium agreed to invest $ 12,250 in cash and cancel any outstanding principal and accrued interest on the Bridge Notes (as defined below) in return for the issuance of shares of GRI Operations common stock (GRI Operations Common Stock) immediately prior to the consummation of the Merger.

Pursuant to the Equity SPA, immediately prior to the Closing, GRI Operations issued 74,584 shares of GRI Operations Common Stock (the Initial Shares) to Altium and 298,339 shares of GRI Operations Common Stock (the Additional Shares) into escrow with an escrow agent for net proceeds of $ 11,704 , after deducting offering expenses of $ 546 .

At the Closing, pursuant to the Merger, the Initial Shares converted into an aggregate of 2,789 shares of the Company’s Common Stock and the Additional Shares converted into an aggregate of 11,157 shares of the Company’s Common Stock.

On May 8, 2023, in accordance with the terms of the Equity SPA, the Company and Altium authorized the escrow agent to, subject to beneficial ownership limitations, disburse to Altium all of the shares of the Company’s Common Stock issued in exchange for the Additional Shares.

On February 1, 2024, the Company entered into a securities purchase agreement (the February 2024 Purchase Agreement), pursuant to which the Company agreed to issue and sell, in a public offering, (i) 25,419 shares (the February 2024 Shares) of Common Stock, (ii) 359,196 pre-funded warrants (the February 2024 Pre-Funded Warrants) exercisable for an aggregate of 359,196 shares of Common Stock, (iii) 384,615 Series B-1 common warrants (the Series B-1 Common Warrants) exercisable for an aggregate of 384,615 shares of Common Stock, and (iv) 384,615 Series B-2 common warrants (the Series B-2 Common Warrants, and together with the Series B-1 Common Warrants, the Series B Common Warrants) exercisable for an aggregate of 384,615 shares of Common Stock for net proceeds of $ 4,389 , after deducting offering expenses of $ 1,110 .

The Series B Common Warrants together with the February 2024 Pre-Funded Warrants are referred to in this Quarterly Report on Form 10-Q as the “February 2024 Warrants.” The securities were offered in combinations of (a) one February 2024 Share or one February 2024 Pre-Funded Warrant, together with (b) one Series B-1 Common Warrant and one Series B-2 Common Warrant, for a combined purchase price of $ 14.30 (less $ 0.0013 for each February 2024 Pre-Funded Warrant).

Subject to certain ownership limitations, the February 2024 Warrants became exercisable upon issuance.

Each February 2024 Pre-Funded Warrant was exercisable for one share of Common Stock at a price per share of $ 0.0013 and expired when exercised in full.

Each Series B-1 Common Warrant is exercisable into one share of Common Stock at a price per share of $ 14.30 for a five-year period after February 6, 2024, the date of issuance.

Each Series B-2 Common Warrant is exercisable into one share of Common Stock at a price per share of $ 14.30 for an 18 -month period after February 6, 2024 the date of issuance.

As of September 30, 2024, all of the February 2024 Pre-Funded Warrants have been exercised.

In connection with the issuance of the February 2024 Shares and February 2024 Warrants pursuant to the February 2024 Purchase Agreement, the exercise price of the Series A-1 Warrants was reduced to par, or $ 0.0001 , per share pursuant to the terms of the Series A-1 Warrants.

As of September 30, 2024, all of the Series A-1 Warrants have been exercised.

As of March 31, 2025, the Company had cash of approximately $ 3,281 .

On February 1, 2024, the Company entered into a securities purchase agreement (the February 2024 Purchase Agreement), pursuant to which the Company agreed to issue and sell, Common Stock, pre-funded warrants and common warrants in a public offering (the February 2024 Offering) for net proceeds of $ 4,389 , after deducting offering expenses of $ 1,110 .

On May 20, 2024, the Company entered into an At The Market Offering Agreement (the Sales Agreement) with H.C.

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Under the Sales Agreement, Wainwright is entitled to compensation of 3.0 % of the gross offering proceeds of all shares of Common Stock sold through it pursuant to the Sales Agreement.

As of September 30, 2024, the Company has sold 2,387,296 shares of Common Stock in the ATM Offering at a weighted-average price of $ 0.83 per share, raising $ 1,988 of gross proceeds and net proceeds of $ 1,910 , after deducting commissions to the sales agent and other ATM Offering related expenses.

On July 26, 2024, the Company filed a prospectus supplement to its registration statement on Form S-1 (File No.

333-279348) to increase the amount of shares of Common Stock that the Company may offer and sell under the Sales Agreement and applicable registration statement to an aggregate offering price of up to $ 2,644 , which amount does not include the shares of Common Stock having an aggregate gross sales price of approximately $ 961 that were sold under the ATM Offering through June 30, 2024.

On June 26, 2024, the Company entered into a securities purchase agreement (the June 2024 Purchase Agreement), pursuant to which the Company agreed to issue and sell, in a public offering (the June 2024 Offering), (i) 60,000 shares (the June 2024 Shares) of Common Stock, (ii) 2,125,793 pre-funded warrants (the June 2024 Pre-Funded Warrants) exercisable for an aggregate of 2,125,793 shares of Common Stock, (iii) 2,185,793 Series C-1 common warrants (the Series C-1 Common Warrants) exercisable for an aggregate of 2,185,793 shares of Common Stock, and (iv) 2,185,793 Series C-2 common warrants (the Series C-2 Common Warrants, and together with the Series C-1 Common Warrants, the Series C Common Warrants) exercisable for an aggregate of 2,185,793 shares of Common Stock for net proceeds of $ 3,172 , after deducting offering expenses of $ 1,057 .

The Series C Common Warrants together with the June 2024 Pre-Funded Warrants are referred to in this Quarterly Report on Form 10-Q as the “June 2024 Warrants.” The securities were offered in combinations of (a) one June 2024 Share or one June 2024 Pre-Funded Warrant, together with (b) one Series C-1 Common Warrant and one Series C-2 Common Warrant, for a combined purchase price of $ 1.83 (less $ 0.0001 for each June 2024 Pre-Funded Warrant).

The June 2024 Pre-Funded Warrants were exercisable for one share of Common Stock at a price per share of $ 0.0001 , were exercisable immediately and have been exercised in full as of September 30, 2024.

Each Series C-1 Common Warrant is exercisable into one share of Common Stock at a price per share of $ 1.83 for a five-year period beginning after September 6, 2024.

Each Series C-2 Common Warrant is exercisable into one share of Common Stock at a price per share of 1.83 for an 18 -month period beginning after September 6, 2024.

Based on the Company’s current operating plan, the Company believes that its existing cash and cash equivalents will be sufficient to fund its operating expenses and capital expenditure requirements into the middle of the first quarter of 2025.

As of March 31, 2025, the Company has sold 325,618 shares of Common Stock in the ATM Offering at a weighted-average price of $ 11.07 per share, raising $ 3,605 of gross proceeds and net proceeds of $ 3,467 , after deducting commissions to the sales agent and other ATM Offering related expenses.

On June 26, 2024, the Company entered into a securities purchase agreement (the June 2024 Purchase Agreement), pursuant to which the Company agreed to issue and sell Common Stock, pre-funded warrants and common warrants, in a public offering (the June 2024 Offering), for net proceeds of $ 3,172 , after deducting offering expenses of $ 1,057 .

On October 21, 2024, the Company entered into letter agreements (the Repricing Letter Agreements) with certain holders (the Holders) of certain of its issued and outstanding common warrants to purchase shares of its Common Stock, offering these Holders the opportunity to exercise all of their common warrants for cash at a reduced exercise price.

In addition, these Holders received new unregistered common warrants.

The net proceeds to the Company from the exercise of the common warrants were $ 609 after deducting placement agent fees and offering expenses of $ 154 .

The Company’s ability to continue as a going concern is dependent on its ability to raise additional capital to fund its business activities, including its research and development program.

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If the Company is not able to obtain additional financing on acceptable terms and in the amounts necessary to fully fund its future operating requirements, it may be forced to reduce or discontinue its operations entirely.

Therefore, there is substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the issuance of these financial statements.

These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might result from this uncertainty.

Therefore, there is substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the issuance of these unaudited interim consolidated financial statements.

These unaudited interim consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might result from this uncertainty.

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) for interim financial periods and pursuant to the rules of the Securities and Exchange Commission (the SEC).

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) for interim financial periods and pursuant to the rules of the U.S.

Securities and Exchange Commission (the SEC).

Any reference in the accompanying unaudited interim financial statements to “authoritative guidance” is meant to refer to GAAP as found in the Accounting Standards Codification (ASC) and Accounting Standards Updates (ASU) of the Financial Accounting Standards Board (FASB).

The December 31, 2024 balance sheet was derived from the Company’s audited consolidated financial statements.

In the opinion of management, the unaudited interim consolidated financial statements furnished herein include all normal and recurring adjustments considered necessary to present fairly the Company’s financial position as of September 30, 2024, and the consolidated results of operations and consolidated stockholders’ deficit for the three and nine months ended September 30, 2024 and 2023 and consolidated cash flows for the three and nine months ended September 30, 2024 and 2023.

Consolidated results of operations for the three and nine months ended September 30, 2024, are not necessarily indicative of the operating results that may be expected for the year ending December 31, 2024.

In the opinion of management, the unaudited interim consolidated financial statements furnished herein include all normal and recurring adjustments considered necessary to present fairly the Company’s financial position as of March 31, 2025, and the consolidated results of operations and consolidated stockholders’ deficit for the three months ended March 31, 2025 and 2024 and consolidated cash flows for the three months ended March 31, 2025 and 2024.

Consolidated results of operations for the three months ended March 31, 2025, are not necessarily indicative of the operating results that may be expected for the year ending December 31, 2025.

The unaudited interim consolidated financial statements, presented herein, do not contain the required disclosures under GAAP for annual consolidated financial statements.

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Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liabilities.

Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability.

Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

As of September 30, 2024, the Company’s financial instruments included cash, cash equivalents, prepaid expenses and other current assets, accounts payable, accrued expenses and certain liability classified warrants.

The carrying amounts reported in the balance sheets for cash, cash equivalents, prepaid expenses and other current assets, accounts payable and accrued expenses approximate their fair value based on the short-term maturity of these instruments.

As of March 31, 2025, the Company’s financial instruments included cash, cash equivalents, prepaid expenses and other current assets, accounts payable, accrued expenses and certain liability classified warrants.

The carrying amounts reported in the consolidated balance sheets for cash, cash equivalents, prepaid expenses and other current assets, accounts payable and accrued expenses approximate their fair value based on the short-term maturity of these instruments.

The Company recognizes transfers between levels of the fair value hierarchy on the date of the event or change in circumstances that caused the transfer.

At September 30, 2024, there were no financial assets or liabilities measured at fair value on a recurring basis other than the liability classified warrants.

At March 31, 2025, there were no financial assets or liabilities measured at fair value on a recurring basis other than the liability classified warrants.

In May 2022, Vallon Pharmaceuticals, Inc.

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Vallon evaluated the May 2022 Warrants in accordance with ASC 815-40, Derivatives and Hedging — Contracts in Entity’s Own Equity (ASC 815-40), and concluded that a provision in the May 2022 Warrants related to the reduction of the exercise price in certain circumstances precluded the May 2022 Warrants from being accounted for as components of equity.

As a result, the May 2022 Warrants were recorded as a liability on the balance sheet.

As a result, the May 2022 Warrants were recorded as a liability on the consolidated balance sheet.

Vallon recorded the fair value of the May 2022 Warrants upon issuance using a Black-Scholes valuation model.

The Company is required to revalue the May 2022 Warrants at each reporting date with any changes in fair value recorded in its statement of operations.

The Company is required to revalue the May 2022 Warrants at each reporting date with any changes in fair value recorded in its consolidated statements of operations.

The valuation of the May 2022 Warrants is considered under Level 3 of the fair value hierarchy due to the need to use assumptions in the valuation that are both significant to the fair value measurement and unobservable.

The change in the fair value of the Level 3 warrant liability is reflected in the statement of operations for the nine months ended September 30, 2024.

The change in the fair value of the Level 3 warrant liability is reflected in the consolidated statement of operations for the three months ended March 31, 2025.

As of March 31, 2025 and December 31, 2024, the fair value of the warrant liability was immaterial.

Deferred Stock Issuance Costs

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Net Loss Per Common Share

Basic and diluted net loss per common share is computed based on the weighted average number of shares of common stock outstanding during each year.

Diluted net loss per common share is computed based on the weighted average number of shares of common stock outstanding during each year, plus the dilutive effect of options considered to be outstanding during each year, in accordance with ASC 260, Earnings Per Share .

As the Company had a net loss in each of the three and nine months ended September 30, 2024 and 2023, diluted net loss per common share is the same as basic net loss per common share for the period because the effects of potentially dilutive securities are antidilutive.

Basic net loss per common share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during each period.

For the three-month period ended March 31, 2024, basic net loss per common share includes the weighted average of the February 2024 Pre-Funded Warrants (as defined below).

Diluted net loss per common share is computed by dividing the net loss by the weighted average number of shares of common stock outstanding during each period, plus the dilutive effect of common stock equivalents outstanding during each period, in accordance with ASC 260, Earnings Per Share .

As the Company had a net loss in each of the three months ended March 31, 2025 and 2024, diluted net loss per common share is the same as basic net loss per common share for the period because the effects of potentially dilutive securities are antidilutive .

Common stock equivalents excluded from the diluted net loss per common share calculations are as follows:

September 30,

Stock options 21,270 142

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Recent Accounting Pronouncements

The Company considered the applicability and impact of all ASUs issued during the quarter ended September 30, 2024 and each was determined to be either not applicable or expected to have minimal impact on these unaudited interim consolidated financial statements.

MERGER WITH VALLON

On April 21, 2023, pursuant to the Merger Agreement, Merger Sub was merged with and into GRI Operations, with GRI Operations surviving the Merger as a wholly owned subsidiary of the Company.

In connection with the Closing, the Company amended its certificate of incorporation and bylaws to change its name from “Vallon Pharmaceuticals, Inc.” to “GRI Bio, Inc.”

At the Effective Time:

(a) Each share of GRI Operations Common Stock outstanding immediately prior to the Effective Time, including any shares of GRI Operations Common Stock issued pursuant to the Equity SPA, automatically converted solely into the right to receive a number of shares of the Company’s Common Stock equal to 0.0374 (the Exchange Ratio).

(b) Each option to purchase shares of GRI Operations Common Stock (each, a GRI Operations Option) outstanding and unexercised immediately prior to the Effective Time under the GRI Bio, Inc.

2015 Equity Incentive Plan, as amended (the GRI Operations Plan), whether or not vested, converted into and became an option to purchase shares of the Company’s Common Stock, and the Company assumed the GRI Operations Plan and each such GRI Operations Option in accordance with the terms of the GRI Operations Plan (the Assumed Options).

The number of shares of Common Stock subject to each Assumed Option was determined by multiplying (i) the number of shares of GRI Operations Common Stock that were subject to such GRI Operations Option, as in effect immediately prior to the Effective Time, by (ii) the Exchange Ratio, and rounding the resulting number down to the nearest whole number of shares of Common Stock.

The per share exercise price for the Common Stock issuable upon exercise of each Assumed Option was determined by dividing (A) the per share exercise price of such Assumed Option, as in effect immediately prior to the Effective Time, by (B) the Exchange Ratio and rounding the resulting per share exercise price up to the nearest whole cent.

Any restriction on the exercise of any Assumed Option continued in full force and effect and the term, exercisability, vesting schedule, and any other provisions of such Assumed Option otherwise remained unchanged.

(c) Each warrant to purchase shares of GRI Operations Common Stock (the GRI Operations Warrants) outstanding immediately prior to the Effective Time was assumed by the Company and converted into a warrant to purchase shares of Common Stock (the Assumed Warrants) and thereafter (i) each Assumed Warrant became exercisable solely for shares of the Common Stock;

(ii) the number of shares of Common Stock subject to each Assumed Warrant was determined by multiplying (A) the number of shares of GRI Operations Common Stock that were subject to such GRI Operations Warrant, as in effect

immediately prior to the Effective Time, by (B) the Exchange Ratio, and rounding the resulting number down to the nearest whole number of shares of Common Stock;

and (iii) the per share exercise price for shares of Common Stock issuable upon exercise of each Assumed Warrant was determined by dividing (A) the exercise price per share of GRI Operations Common Stock subject to such GRI Operations Warrant, as in effect immediately prior to the Effective Time, by (B) the Exchange Ratio, and rounding the resulting exercise price up to the nearest whole cent.

(d) The Bridge Warrants (Note 8) were exchanged for warrants (the Exchange Warrants) to purchase an aggregate of 4,632 shares of the Company’s Common Stock.

The Exchange Warrants contain substantively similar terms to the Bridge Warrants and have an initial exercise price equal to $ 1,340.43 per share.

(e) All rights with respect to GRI Operations restricted stock awards were assumed by the Company and converted into Company restricted stock awards with the number of shares subject to each restricted stock award multiplied by the Exchange Ratio and rounding the resulting number down to the nearest whole number of shares of the Company’s Common Stock.

The term, exercisability, vesting schedule and other provisions of the GRI Operations restricted stock awards otherwise remained unchanged.

The Merger was accounted for as a reverse recapitalization under GAAP because the primary assets of Vallon were cash and cash equivalents.

For accounting purposes, GRI Operations was determined to be the accounting acquirer based upon the terms of the Merger and other factors including:

(i) the equity holders of GRI Operations immediately prior to the Merger owned, or held rights to acquire, in the aggregate approximately 85 % of the outstanding shares of the Company’s Common Stock and the Company’s stockholders immediately prior to the Merger owned approximately 15 % of the outstanding shares of the Company’s Common Stock (ii) GRI Operations holds the majority (4 out of 5) of board seats of the combined company, and (iii) GRI Operations’ management holds the majority of key positions in the management of the combined company.

The following table shows the net liabilities assumed in the Merger:

April 21, 2023

Cash and cash equivalents $ 941

Prepaid and other assets 310

Accounts payable and accrued expenses ( 4,190 )

Total net liabilities assumed ( 2,939 )

Transaction costs ( 2,984 )

Total net liabilities assumed plus transaction costs $ ( 5,923 )

In addition to the transaction costs noted above, at the Effective Time, 335 shares of Common Stock were issued to GRI Operations’ financial advisor for services related to the Merger.

FAIR VALUE MEASUREMENTS

The Company applies the guidance in ASC 820 to account for financial assets and liabilities measured on a recurring basis.

Fair value is measured as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

As such, fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or liability.

The Company uses a fair value hierarchy, which distinguishes between assumptions based on market data (observable inputs) and an entity's own assumptions (unobservable inputs).

The guidance requires that fair value measurements be classified and disclosed in one of the following 3 categories:

Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liabilities;

Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

Determining which category an asset or liability falls within the hierarchy requires significant judgment.

The Company evaluates its hierarchy disclosures each reporting period.

There were no transfers between Level 1, 2 and 3 during the nine months ended September 30, 2024.

The following table presents, for each of the fair value hierarchy levels required under ASC 820, the Company’s liabilities that are measured at fair value on a recurring basis at September 30, 2024:

Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Other Unobservable Inputs (Level 3)

Warrant liability $ — $ — $ —

Total liabilities $ — $ — $ —

The following table presents the changes in the fair value of the Level 3 liability:

Warrant Liability

Fair value as of December 31, 2023 $ 3

Change in valuation ( 3 )

Fair value as of September 30, 2024

The Black-Scholes valuation model was used to estimate the fair value of the May 2022 Warrants with the following weighted-average assumptions:

September 30, 2024 December 31, 2023

Volatility 159.3 % 171.0 %

Expected term in years 2.5 2.5

Dividend rate 0.0 % 0.0 %

Risk-free interest rate 3.62 % 4.12 %

The Company considered the applicability and impact of all ASUs issued during the quarter ended March 31, 2025.

ASUs not discussed below were assessed and determined to be either not applicable or expected to have minimal impact on these unaudited interim consolidated financial statements

In November 2023, the FASB issued ASU No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures (ASU 2023-07).

This amended guidance applies to all public entities and aims to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

This guidance is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024.

The Company has adopted the provisions of ASU 2023-07 and has included the required disclosures in this Quarterly Report on Form 10-Q.

See Note 8 for additional disclosures.

PROPERTY AND EQUIPMENT

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Computer equipment $ 21 $ 21

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Accumulated depreciation ( 31 ) ( 30 )

Depreciation expense related to property and equipment was $ 3 in each of the nine-month periods ended September 30, 2024 and 2023.

Depreciation expense related to property and equipment was $ 1 in each of the three-month periods ended March 31, 2025 and 2024.

ACCRUED EXPENSES

Accrued expenses consist of the following:

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Research and development $ 630 $ 342

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Total accrued expenses $ 1,368 $ 691

PROMISSORY NOTES

Bridge Financing

In connection with signing the Merger Agreement, GRI Operations entered into a Securities Purchase Agreement, dated as of December 13, 2022 (the Bridge SPA), with Altium, pursuant to which GRI Operations issued senior secured promissory notes (Bridge Notes) in the aggregate principal amount of $ 3,333 , in exchange for an aggregate purchase price of $ 2,500 .

The Bridge Notes were issued in two closings:

(i) the first closing for $ 1,667 in aggregate principal amount (in exchange for an aggregate purchase price of $ 1,250 ) closed on December 14, 2022;

and (ii) the second closing for $ 1,667 in aggregate principal amount (in exchange for an aggregate purchase price of $ 1,250 ) closed on March 9, 2023.

The Bridge Notes were secured by a lien on all of the Company’s assets.

In addition, upon the funding of each tranche, Altium received warrants to purchase an aggregate of 13,763 shares of Common Stock (the Bridge Warrants).

The Bridge Warrants had an exercise price of $ 121.03 per share, were exercisable at any time on or after the applicable issuance date and had a term of 60 months from the date all shares underlying the Bridge Warrants were freely tradable.

The $ 1,250 of proceeds from the first closing were allocated to the Bridge Notes and Bridge Warrants based on their relative fair values as of the commitment date, resulting in an allocation of $ 679 and $ 571 , respectively.

The $ 1,250 of proceeds from the second closing were allocated to the Bridge Notes and Bridge Warrants based on their relative fair values as of the commitment date, resulting in an allocation of $ 718 and $ 532 , respectively.

In addition to the Bridge SPA, and also in connection with signing the Merger Agreement, the Company, GRI Operations and Altium entered into the Equity SPA (Note 9) pursuant to which Altium agreed to invest $ 12,250 in cash and cancel any outstanding principal and accrued interest on the Bridge Notes in return for the issuance of shares of GRI Operations Common Stock immediately prior to the consummation of the Merger.

On April 21, 2023, the Company completed the Merger and the outstanding principal and accrued interest on the Bridge Notes was cancelled and the Bridge Warrants were exchanged for the Exchange Warrants.

The Exchange Warrants contain substantively similar terms to the Bridge Warrants, and have an initial exercise price equal to $ 1,340.43 per share subject to adjustments for splits and recapitalization events.

The Bridge Notes were accounted for as share-settled debt under the accounting guidance in ASC 835-30 and, as such, the initial net carrying amounts were accreted to the redemption amounts using the effective interest method.

The Company incurred $ 205 of debt issuance costs related to its issuance of debt under the Bridge SPA, of which $ 90 was incurred during the nine months ended September 30, 2023 related to its issuance of debt under the Bridge SPA.

Interest expense stemming from amortization of debt discounts and issuance costs was $ 2,104 for the nine months ended September 30, 2023.

STOCKHOLDERS’ EQUITY

Equity Securities Purchase Agreement

In connection with signing the Merger Agreement, the Company, GRI Operations and Altium entered the Equity SPA pursuant to which Altium agreed to invest $ 12,250 in cash and cancel any outstanding principal and accrued interest on the Bridge Notes in return for the issuance of shares of GRI Operations Common Stock immediately prior to the consummation of the Merger.

Pursuant to the Equity SPA, immediately prior to the Closing, GRI Operations issued the Initial Shares to Altium and the Additional Shares into escrow with an escrow agent for net proceeds of $ 11,704 , after deducting offering expenses of $ 546 .

At the Closing, pursuant to the Merger, the Initial Shares converted into an aggregate of 2,789 shares of Common Stock and the Additional Shares converted into an aggregate of 11,157 shares of Common Stock.

On May 8, 2023, in accordance with the terms of the Equity SPA, the Company and Altium authorized the escrow agent to, subject to beneficial ownership limitations, disburse to Altium all of the shares of the Common Stock issued in exchange for the Additional Shares.

February 2024 Securities Purchase Agreement

On February 1, 2024, the Company entered into the February 2024 Purchase Agreement, pursuant to which the Company agreed to issue and sell, in the February 2024 Offering, (i) 25,419 February 2024 Shares, (ii) 359,196 February 2024 Pre-Funded Warrants exercisable for an aggregate of 359,196 shares of Common Stock, (iii) 384,615 Series B-1 Common Warrants exercisable for an aggregate of 384,615 shares of Common Stock and (iv) 384,615 Series B-2 Common Warrants exercisable for an aggregate of 384,615 shares of Common Stock for net proceeds of $ 4,389 , after deducting offering expenses of $ 1,110 .

The securities were offered in combinations of (a) one February 2024 Share or one February 2024 Pre-Funded Warrant, together with (b) one Series B-1 Common Warrant and one Series B-2 Common Warrant, for a combined purchase price of $ 14.30 (less $ 0.0013 for each February 2024 Pre-Funded Warrant).

On February 1, 2024, the Company entered into the February 2024 Purchase Agreement, pursuant to which the Company agreed to issue and sell, in the February 2024 Offering, (i) 1,495 shares (the February 2024 Shares) of Common Stock, (ii) 21,131 pre-funded warrants (the February 2024 Pre-Funded Warrants) exercisable for an aggregate of 21,131 shares of Common Stock, (iii) 22,631 Series B-1 common warrants (the Series B-1 Common Warrants) exercisable for an aggregate of 22,631 shares of Common Stock and (iv) 22,631 Series B-2 common warrants (the Series B-2 Common Warrants and together with the Series B-1 Common Warrants, the Series B Common Warrants) exercisable for an aggregate of 22,631 shares of Common Stock for net proceeds of $ 4,389 , after deducting offering expenses of $ 1,110 .

The Series B Common Warrants together with the February 2024 Pre-Funded Warrants are referred to in this Quarterly Report on Form 10-Q (the Quarterly Report) as the “February 2024 Warrants.” The securities were offered in combinations of (a) one February 2024 Share or one February 2024 Pre-Funded Warrant, together with (b) one Series B-1 Common Warrant and one Series B-2 Common Warrant, for a combined purchase price of $ 243.10 (less $ 0.0221 for each February 2024 Pre-Funded Warrant).

Subject to certain ownership limitations, the February 2024 Warrants were exercisable upon issuance.

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The February 2024 Warrants were classified as equity and the allocated fair value of $ 4,279 is included in additional paid-in capital.

As of September 30, 2024, all of the February 2024 Pre-Funded Warrants have been exercised.

The Company determined that the amount paid for the February 2024 Pre-Funded Warrants approximates their fair value.

The Black-Scholes option-pricing model was used to estimate the fair value of the Series B-1 Common and Series B-2 Common Warrants with the following weighted-average assumptions:

Volatility 156.3 %

Expected term in years 1.63

Dividend rate 0.0 %

Risk-free interest rate 4.65 %

In connection with the issuance of the securities pursuant to the February 2024 Purchase Agreement, the exercise price of the Series A-1 Warrants issued in connection with the Merger was reduced to par, or $ 0.0001 , per share pursuant to the terms of the Series A-1 Warrants.

As of March 31, 2025, all of the February 2024 Pre-Funded Warrants have been exercised.

In connection with the issuance of the securities pursuant to the February 2024 Purchase Agreement, the exercise price of the Company’s previously outstanding Series A-1 Warrants was reduced to par, or $ 0.0001 , per share pursuant to the terms of the Series A-1 Warrants.

As of March 31, 2025, all of the Series A-1 Warrants have been exercised.

May 2024 At The Market Offering

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Under the Sales Agreement, Wainwright is entitled to compensation of 3.0 % of the gross offering proceeds of all shares of Common Stock sold through it pursuant to the Sales Agreement.

As of September 30, 2024, the Company has sold 2,387,296 shares of Common Stock in the ATM Offering at a weighted-average price of 0.83 per share, raising $ 1,988 of gross proceeds and net proceeds of $ 1,910 , after deducting commissions to the sales agent and other ATM Offering related expenses.

On July 26, 2024, the Company filed a prospectus supplement to its registration statement on Form S-3 (File No.

On May 5, 2025, the Company filed a prospectus supplement to its registration statement on Form S-3 (File No.

333-279348) to increase the amount of shares of Common Stock that the Company may offer and sell under the Sales Agreement and applicable registration statement to an aggregate offering price of up to $ 1,671 , which amount does not include the shares of Common Stock having an aggregate gross sales price of approximately $ 3,605 that were sold under the ATM Offering through March 31, 2025, in accordance with the limitations set forth in Instruction I.B.6 of Form S-3.

June 2024 Securities Purchase Agreement

On June 26, 2024, the Company entered into the June 2024 Purchase Agreement, pursuant to which the Company issued and sold, in the June 2024 Offering, (i) 60,000 June 2024 Shares, (ii) 2,125,793 June 2024 Pre-Funded Warrants exercisable for an aggregate of 2,125,793 shares of Common Stock, (iii) 2,185,793 Series C-1 Common Warrants exercisable for an aggregate of 2,185,793 shares of Common Stock, and (iv) 2,185,793 Series C-2 Common Warrants, exercisable for an aggregate of 2,185,793 shares of Common Stock for net proceeds of $ 3,172 , after deducting offering expenses of $ 1,057 .

The securities were offered in combinations of (a) one June 2024 Share or one June 2024 Pre-Funded Warrant, together with (b) one Series C-1 Common Warrant and one Series C-2 Common Warrant, for a combined purchase price of $ 1.83 (less $ 0.0001 for each June 2024 Pre-Funded Warrant).

On June 26, 2024, the Company entered into the June 2024 Purchase Agreement, pursuant to which the Company issued and sold, in the June 2024 Offering, (i) 3,529 shares (the June 2024 Shares) of Common Stock, (ii) 125,047 pre-funded warrants (the June 2024 Pre-Funded Warrants) exercisable for an aggregate of 125,047 shares of Common Stock, (iii) 128,577 Series C-1 common warrants (the Series C-1 Common Warrants) exercisable for an aggregate of 128,577 shares of Common Stock, and (iv) 128,577 Series C-2 common warrants (the Series C-2 Common Warrants, and together with the Series C-1 Common Warrants, the Series C Common Warrants), exercisable for an aggregate of 128,577 shares of Common Stock for net proceeds of $ 3,172 , after deducting offering expenses of $ 1,057 .

The Series C Common Warrants together with the June 2024 Pre-Funded Warrants are referred to in this Quarterly Report as the “June 2024 Warrants.” The securities were offered in combinations of (a) one June 2024 Share or one June 2024 Pre-Funded Warrant, together with (b) one Series C-1 Common Warrant and one Series C-2 Common Warrant, for a combined purchase price of $ 31.11 (less $ 0.0017 for each June 2024 Pre-Funded Warrant).

The June 2024 Pre-Funded Warrants were exercisable for one share of Common Stock at a price per share of $ 0.0017 , were exercisable immediately and have been exercised in full as of March 31, 2025.

Each Series C-1 Common Warrant is exercisable into one share of Common Stock at a price per share of $ 31.11 for a five-year period beginning after September 6, 2024.

Each Series C-2 Common Warrant is exercisable into one share of Common Stock at a price per share of $ 31.11 for an 18 -month period beginning after September 6, 2024.

The June 2024 Pre-Funded Warrants and the Series C Common Warrants were classified as equity and the allocated fair value of $ 2,908 is included in additional paid in capital.

Pursuant to an engagement agreement (the Engagement Agreement) with Wainwright, the Company, in connection with the June 2024 Offering, issued to Wainwright, or its designees, warrants to purchase up to an aggregate of 153,006 shares of Common Stock (the Placement Agent Warrants).

The Placement Agent Warrants have an exercise price of $ 2.2875 per share, will expire on June 26, 2029 and are exercisable beginning after September 6, 2024.

The Placement Agent Warrants were classified as equity and the fair value of $ 229 is included in additional paid in capital.

The Company determined that the amount paid for the June 2024 Pre-Funded Warrants approximates their fair value.

The Black-Scholes option-pricing model was used to estimate the fair value of the Series C-1 Common Warrants, the Series C-2 Common Warrants, and the Placement Agent Warrants with the following weighted-average assumptions:

Volatility 159.1 %

Expected term in years 1.65

Dividend rate 0.0 %

Risk-free interest rate 4.92 %

As of September 30, 2024, the Company had the following warrants outstanding to purchase Common Stock.

The June 2024 Warrants were classified as equity and the allocated fair value of $ 2,908 is included in additional paid-in capital.

Pursuant to an engagement agreement with Wainwright, the Company, in connection with the June 2024 Offering, issued to Wainwright, or its designees, warrants to purchase up to an aggregate of 9,001 shares of Common Stock (the June 2024 PA Warrants).

The June 2024 PA Warrants have an exercise price of $ 38.89 per share, will expire on June 26, 2029 and are exercisable beginning after September 6, 2024.

The June 2024 PA Warrants were classified as equity and the fair value of $ 229 is included in additional paid-in capital.

October 2024 Repricing Letter Agreement

On October 21, 2024, the Company entered into the Repricing Letter Agreements with certain Holders of its issued and outstanding Series B Common Warrants to purchase an aggregate of 44,842 shares of its Common Stock, offering these Holders the opportunity to exercise all of their Series B Common Warrants for cash at a reduced exercise price equal to $ 17.00 per share.

In addition, these Holders received new unregistered Series D-1 common warrants (the Series D-1 Common Warrants) exercisable for up to an aggregate of 44,839 shares of Common Stock and new unregistered Series D-2 common warrants (the Series D-2 Common Warrants and, together with the Series D-1 Common Warrants, the Series D Common Warrants) exercisable for up to an aggregate of 44,839 shares of Common Stock.

The Series D Common Warrants are immediately exercisable and have an exercise price of $ 17.00 per share.

The Series D-1 Common Warrants expire on October 22, 2029, and the Series D-2 Common Warrants expire on April 22, 2026.

This transaction is referred to as the “Warrant Repricing Transaction.”

Wainwright acted as the exclusive placement agent for the Warrant Repricing Transaction pu rsuant to an engagement agreement between the Company and Wainwright dated as of October 21, 2024.

As compensation for such placement agent services, the Company agreed to pay Wainwright an aggregate cash fee equal to 7.0 % of the gross proceeds received by the Company from the Warrant Repricing Transaction, plus a management fee equal to 1.0 % of the gross proceeds received by the Company from the Warrant Repricing Transaction, and reimbursement for accountable expenses of $ 25,000 and non-accountable expenses of $ 10,000 .

The Company has also issued to Wainwright or its designees the October 2024 PA Warrants to purchase up to an aggregate of 3,140 shares of Common Stock (the October 2024 PA Warrant).

The October 2024 PA Warrants are immediately exercisable, expire on October 22, 2029, and have an exercise price of $ 21.25 per share.

The net proceeds to the Company from the exercise of the Series B Common Warrants were $ 202 after deducting placement agent fees and offering expenses of $ 560 .

The issuance under the Repricing Letter Agreements represented $ 1,526 in additional value provided to the investors, which was recorded as a deemed dividend to common stockholders.

As of March 31, 2025, the Company had the following warrants outstanding to purchase Common Stock:

Number of Shares Exercise Price per Share Expiration Date

2 unchanged sentences

128,577 $ 31.11 March 2026

44,839 $ 17.00 April 2026

16 $ 43,548.05 May 2027

4 unchanged sentences

128,577 $ 31.11 September 2029

44,839 $ 17.00 October 2029

3,140 $ 21.25 October 2029

STOCK-BASED COMPENSATION

2015 Equity Incentive Plan

GRI Operations adopted the GRI Operations Plan, which provided GRI Operations with the ability to grant stock options, restricted stock awards and other equity-based awards to employees, directors, and consultants.

Upon completion of the Merger, the Company assumed the GRI Operations Plan and 982 outstanding and unexercised options issued thereunder, and ceased granting awards under the GRI Operations Plan.

As of September 30, 2024, no options remain outstanding under the GRI Operations Plan.

Amended and Restated 2018 Equity Incentive Plan

On April 21, 2023, the stockholders of the Company approved the Amended and Restated GRI Bio, Inc.

2018 Equity Incentive Plan, formerly the Vallon Pharmaceuticals, Inc.

2018 Equity Incentive Plan (the A&R 2018 Plan).

The A&R 2018 Plan had previously been approved by the Company’s board of directors, subject to stockholder approval.

The A&R 2018 Plan became effective on April 21, 2023, with the stockholders approving an amendment to the A&R 2018 Plan to, among other things, (i) to increase the aggregate number of shares by 1,856 shares to 2,381 shares of the Company’s Common Stock for issuance as awards under the A&R 2018 Plan, (ii) to extend the term of the A&R 2018 Plan through January 1, 2033, (iii) to prohibit any action that would be treated as a “repricing” of an award without further approval by the stockholders of Company and (iv) to revise the limits on awards to non-employee directors.

The A&R 2018 Plan provides the Company with the ability to grant stock options, restricted stock and other equity-based awards to employees, directors and consultants.

Stock options granted by the Company under the A&R 2018 Plan generally have a contractual life of up to 10 years.

As of September 30, 2024, awards granted under the A&R 2018 Plan representing the right to purchase or contingent right to receive up to an aggregate of 2,503 shares of the Company's Common Stock were outstanding and 4,367 shares of the Company’s Common Stock were reserved for issuance under the A&R 2018 Plan.

As of March 31, 2025, awards granted under the A&R 2018 Plan representing the right to purchase or contingent right to receive up to an aggregate of 21,270 shares of the Company's Common Stock were outstanding and 21,275 shares of the Company’s Common Stock were reserved for issuance under the A&R 2018 Plan.

The number of shares reserved for issuance under the A&R 2018 Plan may be increased pursuant to the A&R 2018 Plan’s “evergreen” provision on the first day of each calendar year beginning January 1, 2024 and ending on and including January 1, 2033, by a number of shares not to exceed 4 % of the aggregate number of shares of the Company’s Common Stock outstanding on the final day of the immediately preceding calendar year.

The Company recorded stock-based compensation related to equity-based awards issued under the GRI Operations Plan and the A&R 2018 Plan in the following expense categories of its accompanying consolidated statements of operations for the three and nine months ended September 30, 2024 and 2023:

For the Three Months Ended September 30, For the Nine Months Ended September 30,

2024 2023 2024 2023

The Company recorded stock-based compensation related to equity-based awards issued under the A&R 2018 Plan in the following expense categories of its accompanying consolidated statements of operations for the three months ended March 31, 2025 and 2024:

For the Three Months Ended

Research and development $ 25 $ —

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The Company records expense for performance-based awards if the Company concludes that it is probable that the performance condition will be achieved.

The table below represents the activity of stock options granted to employees and non-employees for the nine months ended September 30, 2024:

The table below represents the activity of stock options granted to employees and non-employees for the three months ended March 31, 2025:

Number of options Weighted-average exercise price Weighted-average remaining contractual term (years)

Outstanding at December 31, 2024 142 $ 4,376.92 9.63

Granted 21,128 $ 11.66

Exercised — —

Forfeited/cancelled — —

Outstanding at September 30, 2024 2,503 $ 471.45 8.81

Exercisable at September 30, 2024 932 $ 913.87 8.62

Vested and expected to vest at September 30, 2024 2,503 $ 471.45 8.81

As of September 30, 2024, all of the outstanding and exercisable stock options were out of the money and therefore had no intrinsic value.

As of September 30, 2024, the unrecognized compensation cost related to unvested stock options expected to vest was $ 276 .

Outstanding at March 31, 2025 21,270 $ 40.80 9.81

Exercisable at March 31, 2025 21,196 $ 28.71 9.81

Vested and expected to vest at March 31, 2025 21,270 $ 40.80 9.81

As of March 31, 2025, all of the outstanding and exercisable stock options were out of the money and therefore had no intrinsic value.

As of March 31, 2025, the unrecognized compensation cost related to unvested stock options expected to vest was $ 214 .

This unrecognized compensation is expected to be recognized over a weighted-average amortization period of 1.57 years.

The Company granted 2,427 stock options to employees and non-employees during the nine months ended September 30, 2023.

The Company granted 21,128 stock options to its employees and non-employee directors during the three months ended March 31, 2025.

The Black-Scholes option-pricing model was used to estimate the grant date fair value of each stock option grant at the time of grant using the following weighted-average assumptions:

For the Nine Months Ended September 30,

For the Three Months Ended March 31, 2025

Volatility 110.94 %

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Fair value of option on grant date $ 9.43

No equity-based awards were granted during the nine-month period ended September 30, 2024.

No equity-based awards were granted during the three-month period ended March 31, 2024.

SEGMENT REPORTING

Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker (CODM), or decision-making group, in deciding how to allocate resources in assessing performance.

The Company has one reportable segment:

biotechnology research.

The biotechnology research segment consists of the research and development of products for the treatment of inflammatory disease.

The Company’s CODM is W.

Marc Hertz, Ph.D., Chief Executive Officer and Director.

The accounting policies of the biotechnology research segment are the same as those described in the summary of significant accounting policies.

The CODM assesses performance for the biotechnology research segment based on research and development expenses and general and administrative expenses as part of the overall review of the Company’s consolidated net loss and consolidated cash flows as compared to prior quarters and the Company’s operating budget.

The Company has incurred significant losses since its inception and anticipates incurring continued losses in the future.

As such, the CODM uses cash forecast models in deciding how to allocate resources based on the Company’s available cash resources, as well as its forecasted expenditures.

This information, in conjunction with the assessment of the probability of the success of the Company’s research and development activities, is used to plan the timing and size of future capital raises.

COMMITMENTS AND CONTINGENCIES

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Separation and Release Agreement

In connection with the resignation of David Baker, the Company’s Former Chief Executive Officer, pursuant to the Merger, the Company and Mr.

In connection with the resignation of David Baker, the Company’s Former Chief Executive Officer, the Company and Mr.

Baker entered into a Separation and Release Agreement on April 21, 2023 (the Separation Agreement).

Pursuant to the terms of the Separation Agreement and his employment agreement, Mr.

Baker will receive continuation of his current salary and certain COBRA benefits for 18 months payable in accordance with the Company’s payroll practices.

Baker received continuation of his then current salary and certain COBRA benefits for 18 months payable in accordance with the Company’s payroll practices.

Baker also received a lump sum payment equal to 150 % of his target bonus and agreed to reduce amounts payable with respect to certain future milestone payments.

SUBSEQUENT EVENTS

On October 21, 2024, the Company entered into letter agreements (the Repricing Letter Agreements) with holders (the Holders) of its issued and outstanding Series B-1 Warrants and Series B-2 Warrants (the Prior Warrants) to purchase an aggregate of 762,236 shares of its Common Stock, offering the Holders the opportunity to exercise all of their Prior Warrants for cash at a reduced exercise price equal to $ 1.00 per share.

In addition, the Holders received new unregistered Series D-1 Warrants (the Series D-1 Warrants) exercisable for up to an aggregate of 762,236 shares of Common Stock and new unregistered Series D-2 Warrants (the Series D-2 Warrants and, together with the Series D-1 Warrants, the Series D Warrants) exercisable for up to an aggregate of 762,236 shares of Common Stock.

The Series D Warrants are immediately exercisable and have an exercise price of $ 1.00 per share.

The Series D-1 Warrants have a term of exercise equal to five years from October 22, 2024, and the Series D-2 Warrants have a term of exercise equal to 18 months from October 22, 2024.

Wainwright acted as the exclusive placement agent for the offering pursuant to an engagement agreement between the Company and Wainwright dated as of October 21, 2024.

As compensation for such placement agent services, the Company has agreed to pay Wainwright an aggregate cash fee equal to 7.0 % of the gross proceeds received by the Company from the offering, plus a management fee equal to 1.0 % of the gross proceeds received by the Company from the offering, and reimbursement for accountable expenses of $ 25,000 and non-accountable expenses of $ 10,000 .

The Company has also issued to Wainwright or its designees warrants to purchase up to an aggregate of 53,357 shares of Common Stock (the PA Warrants).

The PA Warrants are immediately exercisable, have a term of five years from October 22, 2024, and have an exercise price of $ 1.25 per share.

The gross proceeds to the Company from the exercise of the Prior Warrants were $ 762 prior to deducting placement agent fees and offering expenses.

The issuance under the Repricing Letter Agreements represented $ 1,171 in additional value provided to the investors, which was recorded as a deemed dividend to common stockholders.

On April 1, 2025, the Company entered into a securities purchase agreement (the April 2025 Purchase Agreement), pursuant to which the Company agreed to sell, in a public offering (the April 2025 Offering), (i) 202,000 shares (the April 2025 Shares) of Common Stock, (ii) 1,186,888 pre-funded warrants (the April 2025 Pre-Funded Warrants) exercisable for an aggregate of 1,186,888 shares of Common Stock, (iii) 1,388,888 Series E-1 common stock warrants (the Series E-1 Common Warrants) to purchase up to 1,388,888 shares of Common Stock, (iv) 1,388,888 Series E-2 common stock warrants (the Series E-2 Common Warrants) to purchase up to 1,388,888 shares of Common Stock, and (v) 1,388,888 Series E-3 common stock warrants (the Series E-3 Common Warrants, and collectively with the Series E-1 Warrants and the Series E-2 Warrants, the Series E Common Warrants) to purchase up to 1,388,888 shares of Common Stock, for gross proceeds of $ 5,000 , before deducting offering expenses.

The April 2025 Offering closed on April 2, 2025.

The securities were offered in combinations of (a) one April 2025 Share or one April 2025 Pre-Funded Warrant, together with (b) one Series E-1 Common Warrant, one Series E-2 Common Warrant and one Series E-3 Common Warrant, for a combined purchase price of $ 3.60 (less $ 0.0001 for each April 2025 Pre-Funded Warrant).

The April 2025 Pre-Funded Warrants have an exercise price of $ 0.0001 per share, become exercisable immediately upon issuance and expire when exercised in full.

Each Series E Common Warrant has an exercise price of $ 3.20 per share and became exercisable immediately upon issuance.

The Series E-1 Common Warrants expire April 2, 2030.

The Series E-2 Common Warrants expire on October 2, 2026.

The Series E-3 Common Warrants expire on January 2, 2026.

Wainwright acted as the exclusive placement agent for the April 2025 Offering pursuant to an engagement agreement between the Company and Wainwright dated as of March 7, 2025.

As compensation for such placement agent services, the Company agreed to pay Wainwright an aggregate cash fee equal to 7.0 % of the gross proceeds received by the Company from the offering, plus a management fee equal to 1.0 % of the gross proceeds received by the Company from the offering, reimbursement for accountable expenses of $ 25,000 , reimbursement of up to $ 100,000 for legal fees and expenses and other out-of-pocket expenses and up to $ 15,950 for the clearing expenses.

The Company also issued to Wainwright, or its designees, warrants to purchase up to an aggregate of 97,222 shares of Common Stock (the April 2025 PA Warrants).

The April 2025 PA Warrants became exercisable immediately upon issuance, expire on April 1, 2030, and have an exercise price of $ 4.50 per share.

As discussed in Note 6, “Stockholders’ Equity” to these unaudited interim consolidated financial statements, on May 5, 2025, the Company filed a prospectus supplement to its registration statement on Form S-3 (File No.

333-279348) to increase the amount of shares of Common Stock that the Company may offer and sell under the Sales Agreement and applicable registration statement to an aggregate offering price of up to $ 1,671 , which amount does not include the shares of Common Stock having an aggregate gross sales price of approximately $ 3,605 that were sold under the ATM Offering through March 31, 2025, in accordance with the limitations set forth in Instruction I.B.6 of Form S-3.

Since March 31, 2025, the Company has sold shares of Common Stock with an aggregate gross sales price of $ 399 .

As of the date of the filing of this Quarterly Report considering the net proceeds from the April 2025 Offering and the net proceeds from the Sales Agreement for sales occurring since March 31, 2025, the Company’s stockholders’ equity is greater than $ 2.5 million.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements