What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-11-14 compared with 2025-08-14 · 60 added, 44 removed, 128 unchanged (45% of the section changed)

7 unchanged sentences

GRI-0621 is also an oral formulation of tazarotene, a synthetic retinoid acid receptor-beta and gamma selective agonist, that is approved in the United States for topical treatment of psoriasis and acne.

As of June 30, 2025, it has been evaluated in over 1,700 patients as an oral product for up to 52-weeks.

As of September 30, 2025, it has been evaluated in over 1,700 patients as an oral product for up to 52-weeks.

We are developing GRI-0621 for the treatment of severe fibrotic lung diseases such as idiopathic pulmonary fibrosis (IPF), a life-threatening progressive fibrotic disease of the lung that affects approximately 140,000 people in the United States, with up to 40,000 new cases per year in the United States.

5 unchanged sentences

Food and Drug Administration has cleared our Investigative New Drug (IND) application, and we have received authorization of our clinical trial application from both the United Kingdom Medicines and Healthcare Products Regulatory Agency and the Australian Therapeutic Goods Administration to initiate the Phase 2a biomarker study evaluating GRI-0621 for the treatment of IPF in the, U.S., United Kingdom and Australia, respectively.

We are evaluating GRI-0621 in a randomized, double-blind, multi-center Phase 2a biomarker study, for which we commenced enrollment in December 2023.Enrollment was completed in July 2025.

No safety concerns have been observed by the Independent Data Monitoring Committee (IDMC) review of the first 12 subjects at two weeks and the first 24 subjects at six weeks of treatment.

Changes from baseline of biomarkers in GRI-0621 treated subjects are suggestive of an anti-fibrotic effect, with decreases in biomarkers of fibrosis formation and increases in biomarkers of fibrosis resolution observed.

Topline results from the Phase 2a biomarker study are expected in the third quarter of 2025.

We have evaluated GRI-0621 in a randomized, double-blind, multi-center Phase 2a biomarker study.

Enrollment commenced in December 2023 and was completed in July 2025.

We previously reported six-week interim data from this study.

No safety concerns were observed by the Independent Data Monitoring Committee review of the first 12 subjects at two weeks and the first 24 subjects at six weeks of treatment.

Changes from baseline of biomarkers in GRI-0621 treated subjects were suggestive of an anti-fibrotic effect, with decreases in biomarkers of fibrosis formation and increases in biomarkers of fibrosis resolution observed.

We expect to release topline results from the Phase 2a biomarker study by the end of November 2025.

Our 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 would be developed for the treatment of autoimmune disorders, with much of our preclinical work in SLE or lupus and MS.

GRI-0803, the lead molecule selected from the library, is a novel oral agonist of type 2 diverse Natural Killer T cells and would be developed for the treatment of autoimmune disorders, with much of our preclinical work in SLE or lupus and MS.

In lupus, the immune system mistakenly attacks its own healthy tissues, especially joints and skin, but can affect almost every organ and tissue of the body.

4 unchanged sentences

Only two drugs have been approved for lupus in the past 50 years, and new treatment options are sorely needed.

In order to focus our resources on our GRI-0621 program, we have limited our development of GRI-0803 pending additional funding.

Subject to obtaining the requisite additional funding and IND clearance, we intend to evaluate GRI-0803 in a Phase 1a and 1b trial initially targeting SLE and to file an IND application with respect to this Phase

1a and 1b trial in 2026.

In order to focus our resources on our GRI-0621 program, we have limited our development of GRI-0803

pending additional funding.

Subject to obtaining the requisite additional funding and IND clearance, we intend to complete IND-enabling studies and file an IND application to evaluate GRI-0803 in a Phase 1a and 1b trial in 2026.

We expect to continue to evaluate indications to select the best fit for further development of the program, but our initial focus would be on lupus.

1 unchanged sentence

April 2025 Securities Purchase Agreement

On April 1, 2025, we entered into a securities purchase agreement (the April 2025 Purchase Agreement), pursuant to which we issued and sold, 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 net proceeds of $4.0 million, before deducting offering expenses of $1.0 million.

On April 1, 2025, we entered into a securities purchase agreement (the April 2025 Purchase Agreement), pursuant to which we issued and sold, in a public offering (the April 2025 Offering), (i) 202,000 shares (the April 2025 Shares) of the Company’s common stock, par value $0.0001 per share (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 Common Warrants and the Series E-2 Common Warrants, the Series E Common Warrants) to purchase up to 1,388,888 shares of Common Stock, for net proceeds of $4.0 million, before deducting offering expenses of $1.0 million.

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).

4 unchanged sentences

The Series E-3 Common Warrants will expire on the nine-month anniversary of the date of issuance.

October 2024 Repricing Letter Agreements

On October 21, 2024, we entered into letter agreements (the Repricing Letter Agreements) with certain holders (the Holders) of our issued and outstanding Series B-1 common warrants and Series B-2 common warrants (together, the Series B Common Warrants) to purchase an aggregate of 44,842 shares of our Common Stock, offering these Holders the opportunity to exercise all of their Series B Common Warrants for cash at an 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.

We refer to this transaction as the “Warrant Repricing Transaction.”

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

In addition to a cash fee, management fee, and reimbursement of certain accountable and non-accountable expenses, we also issued to Wainwright or its designees warrants to purchase up to an aggregate of 3,140 shares of Common Stock (the October 2024 PA Warrants) as compensation for its placement agent services.

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

May 2024 At The Market Offering

2 unchanged sentences

On May 23, 2025, we filed a prospectus supplement to our registration statement on Form S-1 (File No.

333-279348) to increase the amount of shares of Common Stock that we may offer and sell under the Sales Agreement and applicable registration statement to an aggregate offering price of up to $1.8 million, which amount does not include the shares of Common Stock having an aggregate gross sales price of approximately $4.5 million that were sold under the ATM Offering through May 22, 2025, in accordance with the limitations set forth in Instruction I.B.6 of Form S-3.

I.B.6 of Form S-3.

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 June 30, 2025, we have sold 908,172 shares of our Common Stock in the ATM Offering at a weighted-average price of $5.01 per share, raising $4.5 million of gross proceeds and net proceeds of $4.3 million, after deducting commissions to the sales agent and other ATM Offering related expenses, of which 582,554 shares of Common Stock were sold during the quarter ended June 30, 2025, for gross proceeds of $941 and net proceeds of $825.

As of September 30, 2025, we have sold 1,680,099 shares of our Common Stock in the ATM Offering at a weighted-average price of $3.67 per share, raising $6.2 million of gross proceeds and net proceeds of $5.9 million, after deducting commissions to the sales agent and other ATM Offering related expenses.

During the three months ended September 30, 2025, we sold 771,927 shares of Common Stock in the ATM Offering at a weighted average price of $2.10 per share for gross proceeds of $1.6 million and net proceeds of $1.6 million.

During the nine months ended September 30, 2025, we sold 1,354,481 shares of our Common Stock in the ATM Offering at a weighted-average price of $1.89 per share for gross proceeds of $2.6 million and net proceeds of $2.5 million.

Financial Operations Overview

15 unchanged sentences

As a result, the May 2022 Warrants were measured at fair value upon issuance using a Black-Scholes valuation model and are recorded as a liability on the consolidated balance sheet.

The fair value of the May 2022 Warrants is measured at each reporting date and changes in fair value are recognized in the consolidated statements of operations in the period of change.

The fair value of the May 2022 Warrants is

measured at each reporting date and changes in fair value are recognized in the consolidated statements of operations in the period of change.

Interest Income

1 unchanged sentence

Results of Operations

Comparison of the Three Months Ended June 30, 2025 and 2024

Comparison of the Three Months Ended September 30, 2025 and 2024

The following table summarizes the results of our operations for the periods indicated (in thousands):

Three Months Ended June 30,

Three Months Ended September 30,

Operating expenses:

3 unchanged sentences

Loss from operations (3,365) (2,130)

Change in fair value of warrant liability — 1

Interest income 6 7

1 unchanged sentence

Research and Development Expenses

Research and development expenses were $1.9 million and $0.9 million for the three months ended June 30, 2025 and 2024, respectively.

The $1.0 million increase in research and development expenses was primarily due to an increase of $0.9 million in expenses related to the registration development program of GRI-0621 and a $0.1 million increase in personnel expenses.

Research and development expenses were $1.8 million and $1.1 million for the three months ended September 30, 2025 and 2024, respectively.

The $0.7 million increase in research and development expenses was primarily due to an increase of $0.5 million in expenses related to the registration development program of GRI-0621 and a $0.1 million increase in personnel expenses, including stock-based compensation expenses.

General and Administrative Expenses

General and administrative expenses were $1.0 million and $1.4 million for the three months ended June 30, 2025 and 2024, respectively.

The $0.4 million decrease was primarily related to a $0.4 million decrease in professional fees and public company expenses.

General and administrative expenses were $1.6 million and $1.0 million for the three months ended September 30, 2025 and 2024, respectively.

The $0.6 million increase was primarily related to a $0.5 million increase in personnel expenses, including stock-based compensation expenses, a $0.1 million increase in public company expenses.

Interest Income

Interest income was $5,000 and $6,000 for the three months ended June 30, 2025 and 2024, respectively.

Comparison of the Six Months Ended June 30, 2025 and 2024

Interest income was $6,000 and $7,000 for the three months ended September 30, 2025 and 2024, respectively.

Comparison of the Nine Months Ended September 30, 2025 and 2024

The following table summarizes the results of our operations for the periods indicated (in thousands):

Six Months Ended June 30,

Nine Months Ended September 30,

Operating expenses:

4 unchanged sentences

Change in fair value of warrant liability — 3

Interest expense, net 11 13

Interest income 16 19

Net loss $ (9,297) $ (6,259)

Research and Development Expenses

Research and development expenses were $3.5 million and $1.8 million for the six months ended June 30, 2025 and 2024, respectively.

The $1.7 million increase in research and development expenses was primarily due to i ncreases of $1.6 million in expenses related to the development program of GRI-0621 and a $0.1 million increase in personnel expenses.

Research and development expenses were $5.2 million and $2.9 million for the nine months ended September 30, 2025 and 2024, respectively.

The $2.3 million increase in research and development expenses was primarily due to increases of $2.1 million in expenses related to the development program of GRI-0621, $0.2 million in personnel expenses, including stock-based compensation expense and $0.1 million in consulting fees.

General and Administrative Expenses

General and administrative expenses were $2.4 million and $2.3 million for the six months ended June 30, 2025 and 2024, respectively.

General and administrative expenses were $4.1 million and $3.4 million for the nine months ended September 30, 2025 and 2024, respectively.

The $0.7 million increase was primarily related to an increase of $0.8 million in personnel expenses, included stock-based compensation expense, offset by a $0.1 million decrease in public company expenses.

Change in Fair Value of Warrant Liability

The change in fair value of the warrant liability represents a decrease in the fair value of the May 2022 Warrants during the six months ended June 30, 2024.

The change in fair value of the warrant liability represents a decrease in the fair value of the May 2022 Warrants during the nine months ended September 30, 2024.

Interest Income

Interest income was $11,000 and $13,000 for the six months ended June 30, 2025 and 2024, respectively.

Interest income was $16,000 and $19,000 for the nine months ended September 30, 2025 and 2024, respectively.

Liquidity and Capital Resources

Since inception, we have incurred losses and expect to continue to incur losses for the foreseeable future.

We incurred net losses of $5.9 million and $4.1 million for the six months ended June 30, 2025 and 2024, respectively.

As of June 30, 2025, we had an accumulated deficit of $45.7 million.

We incurred net losses of $9.3 million and $6.3 million for the nine months ended September 30, 2025 and 2024, respectively.

As of September 30, 2025, we had an accumulated deficit of $49.0 million.

We have financed our working capital requirements to date through the issuance of Common Stock, warrants, convertible notes and promissory notes.

As of June 30, 2025, we had $5.1 million in cash.

As of September 30, 2025, we had $4.1 million in cash.

The following table summarizes our cash flows for the periods indicated (in thousands):

Six Months Ended June 30,

Nine Months Ended September 30,

Net cash provided by (used in):

1 unchanged sentence

Financing activities 6,242 9,550

Net increase in cash and cash equivalents $ 94 $ 4,545

Net (decrease) increase in cash and cash equivalents $ (973) $ 2,938

Cash Flows from Operating Activities

For the six months ended June 30, 2025 and 2024, $4.9 million and $4.3 million were used in operating activities, respectively.

The $0.6 million increase was primarily due to a $1.8 million increase in net loss and a $0.4 million decrease in cash used for prepaid and other assets and operating lease liabilities, offset by a $0.3 million increase in non-cash adjustments related to stock-based compensation expenses, as well as a $0.8 million increase in cash used for accounts payable and a $0.5 million increase in cash used for accrued expenses.

For the nine months ended September 30, 2025 and 2024, $7.2 million and $6.6 million were used in operating activities, respectively.

The $0.6 million increase was primarily due to a $3.0 million increase in net loss and a $0.2 million decrease in cash used for prepaid and other assets and operating lease liabilities, offset by a $0.8 million increase in non-cash adjustments, primarily related to stock-based compensation expenses, as well as a $0.5 million increase in cash used for accounts payable and a $1.3 million increase in cash used for accrued expenses.

Cash Flows from Financing Activities

Net cash provided by financing activities was $5.0 million for the six months ended June 30, 2025 and was primarily related to $5.0 million in proceeds from the April 2025 Offering and $0.9 million in proceeds from the ATM Offering, offset by $0.9 million of stock issuance costs.

Net cash provided by financing activities was $8.9 million for the six months ended June 30, 2024 and was primarily related to $9.5 million of proceeds from the February 2024 Offering (defined below) and $1.0 million in proceeds from the ATM Offering.

Net cash provided by financing activities was $6.2 million for the nine months ended September 30, 2025 and was primarily related to $5.0 million in proceeds from the April 2025 Offering and $2.6 million in proceeds from the ATM Offering, offset by $1.3 million of stock issuance costs.

Net cash provided by financing activities was $9.6 million for the nine months ended September 30, 2024 and was primarily related to $9.5 million of proceeds from the February 2024 Offering (defined below) and the June 2024 Offering (defined below) and $2.0 million in proceeds from the ATM Offering.

The increase was offset by $1.9 million of stock issuance costs.

1 unchanged sentence

On April 1, 2025, we entered the April 2025 Purchase Agreement, pursuant to which we issued and sold, in the April 2025 Offering, (i) 202,000 April 2025 Shares, (ii) 1,186,888 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 Warrants to purchase up to 1,388,888 shares of Common Stock, (iv) 1,388,888 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 Warrants, to purchase up to 1,388,888 shares of Common Stock, for net proceeds of $4.0 million, after deducting offering expenses of $1.0 million.

June 2024 Securities Purchase Agreement

On June 26, 2024, we entered into securities purchase agreement , pursuant to which we issued and sold, in a public offering (the June 2024 Offering), (i) 3,529 shares of Common Stock, (ii) 125,047 pre-funded warrants exercisable for an aggregate of 125,047 shares of Common Stock, (iii) 128,577 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 exercisable for an aggregate of 128,577 shares of Common Stock for net proceeds of $3.2 million, after deducting offering expenses of $1.1 million.

May 2024 At The Market Offering

On May 23, 2025, we filed a prospectus supplement to our registration statement on Form S-3 (File No.

3 unchanged sentences

Future Funding Requirements

Our net losses were $5.9 million and $4.1 million for the six months ended June 30, 2025 and 2024, respectively.

As of June 30, 2025, we had $5.1 million in cash and an accumulated deficit of $45.7 million.

Our net losses were $9.3 million and $6.3 million for the nine months ended September 30, 2025 and 2024, respectively.

As of September 30, 2025, we had $4.1 million in cash and an accumulated deficit of $49.0 million.

We expect to devote substantial financial resources to our planned activities, particularly as we prepare for, initiate, and conduct our planned clinical trials of GRI-0621 and GRI-0803, advance our discovery programs and continue our product development efforts.

In addition, we expect to incur additional costs associated with operating as a public company.

Based on our current operating plan, we believe that our existing cash and cash equivalents will be sufficient to fund our operating expenses and capital expenditure requirements into the fourth quarter of 2025.

Accordingly, we will need to obtain substantial additional funding in connection with our continuing operations.

We intend 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 our research and development efforts are successful.

If we are unable to secure adequate additional funding, we will need to reevaluate our operating plans and may be forced to make reductions in spending, extend payment terms with suppliers, liquidate assets where possible, delay, scale back or eliminate some or all of our development programs, or relinquish rights to our technology on less favorable terms than we would otherwise choose or cease operations entirely.

We intend 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 on acceptable terms when needed, or at all, even if our research and development efforts are successful.

If we are unable to secure adequate additional funding when needed, we will need to reevaluate our operating plans and may be forced to make reductions in spending, extend payment terms with suppliers, liquidate assets where possible, delay, scale back or eliminate some or all of our development programs, or relinquish rights to our technology on less favorable terms than we would otherwise choose or cease operations entirely.

These actions could materially impact our business, results of operations and future prospects and the value of shares of our Common Stock.

26 unchanged sentences

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 2. Management’s Discussion and Analysis