GRI Bio, Inc. 10-Q

Item 1. Financial Statements. GRI Bio, Inc. Consolidated Balance Sheets (in thousands, except share and per share amounts) March 31, 2025 December 31, 2024 Assets (unaudited) Current assets: Cash and cash equivalents $ 3,281 $ 5,028 Prepaid expenses and other current assets 649 587 Total current assets 3,930 5,615 Property and equipment, net 3 4 Operating lease right-of-use assets 109 120 Total assets $ 4,042 $ 5,739 Liabilities and stockholders' equity Current liabilities: Accounts payable $ 1,361 $ 897 Accrued expenses 1,368 691 Operating lease liabilities, current 50 48 Total current liabilities 2,779 1,636 Operating lease liabilities, non-current 58 71 Total liabilities 2,837 1,707 Commitments and contingencies (Note 9) Stockholders' equity: Common stock, 0.0001 par value; 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 ) Total stockholders’ equity 1,205 4,032 Total liabilities and stockholders' equity $ 4,042 $ 5,739 See accompanying notes to unaudited interim consolidated financial statements. 3 Table of Contents GRI Bio, Inc. Consolidated Statements of Operations (in thousands, except share and per share amounts) (Unaudited) Three Months Ended March 31, 2025 2024 Operating expenses: Research and development $ 1,640 $ 933 General and administrative 1,411 962 Total operating expenses 3,051 1,895 Loss from operations ( 3,051 ) ( 1,895 ) Change in fair value of warrant liability — 2 Interest income 5 6 Net loss $ ( 3,046 ) $ ( 1,887 ) Net loss per share of common stock, basic and diluted $ ( 5.80 ) $ ( 101.05 ) Weighted-average common shares outstanding, basic and diluted 525,447 18,665 See accompanying notes to unaudited interim consolidated financial statements. 4 Table of Contents GRI Bio, Inc. Consolidated Statements of Changes in Stockholders’ Equity (in thousands, except shares) (Unaudited) Three Months Ended March 31, 2025 Common Stock Additional Paid-in Capital Accumulated Deficit Stockholders’ Equity Shares Amount Balance, December 31, 2024 525,485 $ — $ 43,772 $ ( 39,740 ) $ 4,032 Stock-based compensation — — 220 — 220 Fractional share adjustment ( 127 ) — ( 1 ) — ( 1 ) Net loss — — — ( 3,046 ) ( 3,046 ) 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 Shares Amount Balance, December 31, 2023 2,909 $ — $ 31,792 $ ( 31,533 ) $ 259 Stock-based compensation — — 37 — 37 Fractional share adjustment ( 1 ) — — — — Issuance of common stock and prefunded warrants in financing 1,495 — 4,389 — 4,389 Prefunded warrant exercise 10,047 — — — — Net loss — — — ( 1,887 ) ( 1,887 ) Balance, March 31, 2024 (unaudited) 14,450 $ — $ 36,218 $ ( 33,420 ) $ 2,798 See accompanying notes to unaudited interim consolidated financial statements. 5 Table of Contents GRI Bio, Inc. Consolidated Statements of Cash Flows (in thousands) (Unaudited) Three Months Ended March 31, 2025 2024 Operating activities: Net loss $ ( 3,046 ) $ ( 1,887 ) Adjustments to reconcile net loss to cash used in operating activities: Depreciation expense 1 1 Stock-based compensation expense 220 37 Change in fair value of warrant liability — ( 2 ) Change in operating lease right-of-use assets 11 14 Change in operating assets and liabilities: Prepaid expenses and other current assets 196 564 Accounts payable 331 ( 744 ) Accrued expenses 562 ( 172 ) Operating lease liabilities ( 11 ) ( 14 ) Cash used in operating activities ( 1,736 ) ( 2,203 ) Financing activities: Proceeds from issuance of common stock in financing transactions — 5,500 Payment for fractional shares in connection with reverse stock split ( 1 ) — Payment of deferred stock issuance costs ( 10 ) ( 1,014 ) 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 Cash and cash equivalents at end of period $ 3,281 $ 4,091 Supplemental disclosure of non-cash financing activities: 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. 6 Table of Contents GRI Bio, Inc. Notes to Unaudited Interim Consolidated Financial Statements (in thousands, except share and per share data) 1. ORGANIZATION AND DESCRIPTION OF BUSINESS GRI Bio, Inc. (GRI or the Company), based in La Jolla, CA, was incorporated in Delaware in May 2009, which is the date of inception. GRI is a clinical-stage biopharmaceutical company focused on discovering, developing, and commercializing innovative therapies that target serious diseases associated with dysregulated immune responses leading to inflammatory, fibrotic and autoimmune disorders. 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 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 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 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). 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. 2. LIQUIDITY 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 $ 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 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. Wainwright & Co., LLC (Wainwright), pursuant to which the Company may sell and issue, subject to the limitations in the Sales Agreement, up to $ 10.0 million shares of Common Stock from time to time through Wainwright as its sales agent (the ATM Offering). 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 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 . 7 Table of Contents 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 . 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 through the third quarter of 2025. 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. The Company intends to raise capital through additional issuances of equity securities and/or short-term or long-term debt arrangements, but there can be no assurances any such financing will be available when needed, even if the Company’s research and development efforts are successful. 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 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. 3. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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 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. The accompanying unaudited interim consolidated financial statements should be read in conjunction with the annual audited consolidated financial statements and related notes as of and for the year ended December 31, 2024, included in the Company’s Annual Report on Form 10-K filed with the SEC on March 14, 2025. Principles of Consolidation The unaudited interim consolidated financial statements include the accounts of GRI Bio, Inc. and its wholly owned subsidiary, GRI Bio Operations, Inc. All intercompany balances and transactions have been eliminated. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Estimates and assumptions are primarily made in relation to the valuation of share options, warrant issuance and subsequent revaluations, valuation allowances relating to deferred tax assets, accrued expenses and estimation of the incremental borrowing rate for the operating lease. If actual results differ from the Company’s estimates, or to the extent these estimates are adjusted in future periods, the Company’s consolidated results of operations could either benefit from, or be adversely affected by, any such change in estimate. 8 Table of Contents Fair Value Measurements Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820, Fair Value Measurement (ASC 820), establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The three levels of fair value hierarchy defined by ASC 820 are described below: Level 1 : Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Level 2 : 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. Level 3 : 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 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 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. (Vallon) issued warrants (the May 2022 Warrants) in connection with a securities purchase agreement. 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 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 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 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 Deferred stock issuance costs represent incremental costs incurred that are directly attributable to proposed offerings of securities. The costs are charged against the gross proceeds of the respective offering upon closing. Net Loss Per Common Share 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 . 9 Table of Contents Common stock equivalents excluded from the diluted net loss per common share calculations are as follows: March 31, 2025 2024 Stock options 21,270 142 Warrants 359,406 46,621 Total 380,676 46,763 Recent Accounting Pronouncements 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. 4. PROPERTY AND EQUIPMENT March 31, 2025 December 31, 2024 Computer equipment $ 21 $ 21 Furniture and fixtures 13 13 34 34 Accumulated depreciation ( 31 ) ( 30 ) $ 3 $ 4 Depreciation expense related to property and equipment was $ 1 in each of the three-month periods ended March 31, 2025 and 2024. 5. ACCRUED EXPENSES Accrued expenses consist of the following: March 31, 2025 December 31, 2024 Research and development $ 630 $ 342 General and administrative 233 12 Payroll and related 505 337 Total accrued expenses $ 1,368 $ 691 10 Table of Contents 6. STOCKHOLDERS’ EQUITY 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) 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. Each February 2024 Pre-Funded Warrant was exercisable for one share of Common Stock at a price per share of $ 0.0221 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 $ 243.10 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 $ 243.10 for an 18 -month period after February 6, 2024, the date of issuance. 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 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 On May 20, 2024, the Company entered into the Sales Agreement with Wainwright, pursuant to which the Company may sell and issue, subject to the limitations in the Sales Agreement, shares up to $ 10.0 million of Common Stock from time to time in the ATM Offering. 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 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 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) 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). 11 Table of Contents 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 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. 12 Table of Contents Warrants 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 210 $ 243.10 August 2025 9 $ 464,100.00 February 2026 128,577 $ 31.11 March 2026 44,839 $ 17.00 April 2026 16 $ 43,548.05 May 2027 1 $ 0.01 July 2027 3 $ 94,970.33 April 2028 210 $ 243.10 February 2029 9,002 $ 38.8875 June 2029 128,577 $ 31.11 September 2029 44,839 $ 17.00 October 2029 3,140 $ 21.25 October 2029 7. STOCK-BASED COMPENSATION 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 (the A&R 2018 Plan). 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 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 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 March 31, 2025 2024 Research and development $ 25 $ — General and administrative 195 37 Total $ 220 $ 37 The Company measures equity-based awards granted to employees and non-employees based on their fair value on the date of the grant and recognizes compensation expense for those awards over the requisite service period or performance-based period, which is generally the vesting period of the respective award. The measurement date for service-based equity awards is the date of grant, and 13 Table of Contents equity-based compensation costs are recognized as expense over the requisite service period. 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 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 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 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 Three Months Ended March 31, 2025 Volatility 110.94 % Expected term in years 5.00 Dividend rate 0.00 % Risk-free interest rate 4.45 % Fair value of option on grant date $ 9.43 No equity-based awards were granted during the three-month period ended March 31, 2024. 8. 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. 14 Table of Contents 9. COMMITMENTS AND CONTINGENCIES Employment Agreements The Company has entered into employment contracts with its officers that provide for severance and continuation of benefits in the event of termination of employment by the Company without cause or by the employee for good reason. In addition, in the event of termination of employment following a change in control, the vesting of certain equity awards may be accelerated. Separation and Release Agreement 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 received continuation of his then current salary and certain COBRA benefits for 18 months payable in accordance with the Company’s payroll practices. Mr. 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. 15 Table of Contents 10. SUBSEQUENT EVENTS 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. 16 Table of Contents