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Item 2. Management’s Discussion and Analysis

2026-05-13 compared with 2025-11-14 · 93 added, 92 removed, 96 unchanged (66% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes appearing elsewhere in this Quarterly Report on Form 10-Q (the Quarterly Report), the audited financial statements and notes thereto, as well as management’s discussion and analysis of financial condition and results of operations included in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the Securities and Exchange Commission (the SEC) on March 14, 2025 (the Annual Report).

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes appearing elsewhere in this Quarterly Report on Form 10-Q (the Quarterly Report), the audited financial statements and notes thereto, as well as management’s discussion and analysis of financial condition and results of operations included in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the Securities and Exchange Commission (the SEC) on January 30, 2026 (the Annual Report).

Some of the information contained in this discussion and analysis, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act), that involve risks and uncertainties.

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Our 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.

Our lead product candidate, GRI-0621, is an oral inhibitor of type 1 invariant Natural Killer T (iNKT) cells.

Our product candidate, GRI-0621, is an oral inhibitor of type 1 iNKT cells.

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 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.

While there are no approved oral formulations of tazarotene, as of March 31, 2026, 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 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.

Some estimate that IPF affects 3 million globally.

While there are currently two approved therapies for the treatment of lung fibrosis, neither has been associated with improvements in overall survival, and both therapies have been associated with significant side effects leading to poor therapeutic adherence.

In preliminary data from our trials to date with GRI-0621, and earlier trials with oral tazarotene, we have observed GRI-0621 to be well-tolerated and to inhibit iNKT cell activity in subjects.

We and others have shown that activated iNKT are upregulated in IPF, primary sclerosing cholangitis, metabolic dysfunction-associated steatohepatitis, alcoholic liver disease, systemic lupus erythematosus (SLE), multiple sclerosis (MS), ulcerative colitis patients as well as other indications.

In preliminary and topline data from our trials to date with GRI-0621, and earlier trials with oral tazarotene, we have observed GRI-0621 to be well-tolerated and to inhibit iNKT cell activity in subjects.

We and others have shown that activated iNKT are upregulated in IPF, primary sclerosing cholangitis, metabolic dysfunction-associated steatohepatitis, alcoholic liver disease, SLE, MS, ulcerative colitis patients as well as other indications.

In these patients activated iNKT cells are correlated with more severe disease.

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 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.

We most recently evaluated GRI-0621 in a randomized, double-blind, multi-center, 2-arm Phase 2a clinical trial for the treatment of patients diagnosed with IPF.

The primary endpoint for this Phase 2a trial was safety and tolerability of oral GRI-0621 as assessed by clinical labs, vital signs and adverse events after 12 weeks of treatment.

Secondary endpoints were baseline changes in serum biomarkers, differentially expressed genes measured by ribonucleic acid sequencing (RNAseq), T cell receptor sequencing (TCRseq), and flow cytometry in PBMC samples collected at week six and week 12;

an assessment of the PK of GRI-0621 at the week 12 visit of treatment (steady state);

and a determination of the pharmacodynamic activity of oral GRI-0621 as measured by inhibition of immune cell activation in blood after six weeks and 12 weeks, and from BAL fluid after 12 weeks of treatment.

Concurrently, a sub-study examined the number and activity of immune cells in BAL fluid in eight subjects (across various centers).

Additional exploratory endpoints for the trial included assessment of the effect of GRI-0621 on pulmonary function at baseline and after six weeks and 12 weeks of treatment.

35 patients were enrolled in the trial and randomly assigned to a placebo arm and a GRI-0621 treatment arm, of which 19 patients completed treatment in the treatment arm and nine patients completed treatment in the placebo arm.

Based on topline results available to date, the clinical trial met its primary endpoint and the secondary endpoints measured to date (as described below).

Continued analyses of exploratory endpoints, including RNAseq, TCRseq, and the pharmacodynamic activity of GRI-0621, remain consistent with and supportive of previously reported findings.

We have filed additional patent applications based, in part, on these data.

No treatment related serious adverse events were reported for GRI-0621-treated subjects and adverse events were grade 2 (17%) or grade 3 (4%), with dry skin, dry lips, muscle and joint pain as the most common adverse events reported.

There were no increases in cough (0% in the GRI-0621-treated arm compared to 25% in the placebo arm) or gastrointestinal disorders reported in the GRI-0621-treated arm compared to the placebo arm (diarrhea reported in 13% versus 33%, respectively).

80% of the subjects enrolled were

taking background pirfenidone or nintedanib.

No changes in liver enzymes, triglycerides or cholesterol were observed over 12 weeks in patients treated with GRI-0621 and standard of care.

Changes from baseline of serum biomarkers of type I, III and VI collagen 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, including crosslinked type III collagen, observed after 12 weeks of treatment with GRI-0621.

Changes from baseline in type IV collagen were suggestive of initiation of an alveolar basement membrane repair mechanism, an important step in repair of injured lung tissue.

Reductions in neutrophil and macrophage activity (immune cell biomarkers upregulated in IPF and associated with disease progression) and downregulation of genes associated with fibrosis, disease progression and mortality were also observed in patients treated with GRI-0621 and standard of care.

Placebo-adjusted changes from baseline in FVC were observed to increase by 99 ml in the GRI-0621-treated arm and by 139 ml in the subset taking both GRI-0621 and standard of care compared to placebo plus standard of care.

Breathing tests used to measure FVC are subject to large visit-to-visit variability and are dependent on the patient’s effort, often resulting in data outliers.

To minimize the impact of outliers in this FVC dataset, a post hoc data sensitivity analysis was performed.

The results of this 1-per-tail Winsorized analysis demonstrated an increase in placebo-adjusted change from baseline in FVC of 65 ml in the GRI-0621-treated arm and an increase of 89 ml in the subset taking both GRI-0621 and standard of care.

Overall, 95% more GRI-0621 treated subjects experienced an increase in FVC at 12 weeks compared to placebo (39% vs 20% placebo) and 60% fewer subjects experienced a 10% or greater decline in FVC at 12 weeks compared to the placebo-treated arm (8% vs 20% placebo).

GRI-0621-treated subjects also demonstrated increased TCR expression after 12 weeks of treatment compared with baseline or placebo-treated subjects receiving standard of care, suggestive of iNKT inactivation following GRI-0621 treatment.

T cell subsets demonstrated increased type 1-associated cytokines (IFN-γ) and reduced type 2 (IL-4 and IL-13) and type 3-associated cytokines (IL-17A and IL-22) in both BAL and PBMC samples.

Similarly, TGF-β was observed to be reduced after 12 weeks of GRI-0621 treatment in T cell subsets (e.g.

Treg and Treg-like), B cells, monocytes, macrophages and neutrophils in BAL and PBMC samples compared to baseline or placebo-treated subjects receiving standard of care.

GRI-0621 treatment also improved expression of genes associated with lung injury, fibroblast differentiation, extracellular matrix deposition, basement membrane repair, and type II alveolar epithelial cell-to-type I alveolar epithelial cell transition.

The RNAseq data is supportive of and consistent with earlier reported serum biomarker and flow cytometry data.

Final results from this trial will be used to determine dose, safety sample size, clinically relevant endpoints and clinical trial duration in communication with the FDA in designing future trials.

Based on these results and subject to FDA clearance and obtaining the requisite additional funding or resources we plan to initiate (either ourselves or with a strategic partner) a clinical study that, upon completion, has the potential to support, in part, an application for conditional approval of GRI-0621 in the European Union and could have the potential to be regarded as a registrational trial in the United States.

Our product candidate portfolio also includes GRI-0803 and a proprietary library of 500+ compounds.

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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 complete IND-enabling studies and file an IND application to evaluate GRI-0803 in a Phase 1a and 1b trial in 2026.

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

We intend to complete IND-enabling studies and file an IND application to evaluate GRI-0803 in a Phase 1a and 1b trial in healthy volunteers 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.

Recent Developments

Reverse Stock Splits

On January 15, 2026, our stockholders approved the January 2026 Reverse Stock Split within a range of not less than one-for-two and not more than one-for-thirty, and our Board subsequently approved the January 2026 Reverse Stock Split at the ratio of one-for-twenty-eight.

Following these approvals, we filed an amendment to our Charter with the Secretary of State of the State of Delaware to effect the January 2026 Reverse Stock Split as of 4:01 p.m.

Eastern Time on January 23, 2026.

Shares of our Common Stock began trading on a post-split basis on January 26, 2026.

The January 2026 Reverse Stock Split had the effect of reducing the aggregate number of outstanding shares of Common Stock from 15,960,229 outstanding shares on a pre-reverse split basis as of January 23, 2026 to a total of 570,002 shares outstanding on a post-reverse split basis as of January 23, 2026.

Previously, on February 21, 2025, we effected a reverse stock split of our Common Stock at a ratio of one-for seventeen.

Unless otherwise noted, all financial information, share numbers, option numbers, warrant numbers, other derivative security numbers and exercise prices appearing in this Quarterly Report have been adjusted to give effect to the reverse stock splits described herein.

December 2025 Securities Purchase Agreement

On December 11, 2025, we entered into a securities purchase agreement (the December 2025 Purchase Agreement), pursuant to which we issued and sold, in a public offering (the December 2025 Offering), (i) 92,976 shares (the December 2025 Shares) of Common Stock, (ii) 287,977 pre-funded warrants (the December 2025 Pre-Funded Warrants) exercisable for an aggregate of 287,977 shares of Common Stock and (iii) 380,962 Series F common warrants (the Series F Common Warrants) exercisable for an aggregate of 380,962 shares of Common Stock.

The securities were offered in combinations of (a) one December 2025 Share or one December 2025 Pre-Funded Warrant, together with (b) one Series F Common Warrant, for a combined purchase price of $21.00 (less $0.0028 for each December 2025 Pre-Funded Warrant).

The December 2025 Pre-Funded Warrants were exercisable for one share of Common Stock at a price of $0.0028 per share, were exercisable immediately and expired when exercised in full.

The Series F Common Warrants are exercisable into one share of Common Stock at a price per share of $21.00 and are immediately exercisable.

The Series F Common Warrants will expire on December 12, 2030.

As of March 31, 2026, all of the December 2025 Pre-Funded Warrants have been exercised.

Wainwright & Co., LLC (Wainwright) acted as the exclusive placement agent in the December 2025 Offering.

Pursuant to an engagement agreement, we issued to Wainwright, or its designees, warrants to purchase up to an aggregate of 26,667 shares of Common Stock (the December 2025 PA Warrants) .

The December 2025 PA Warrants have an exercise price of $26.25 per share, will expire on December 12, 2030 and are currently exercisable.

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 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.

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) 7,214 shares (the April 2025 Shares) of the Company’s Common Stock, (ii) 42,389 pre-funded warrants (the April 2025 Pre-Funded Warrants) exercisable for an aggregate of 42,389 shares of Common Stock, (iii) 49,605 Series E-1 common stock warrants (the Series E-1 Common Warrants) to purchase up to 49,605 shares of Common Stock, (iv) 49,605 Series E-2 common stock warrants (the Series E-2 Common Warrants) to purchase up to 49,605 shares of Common Stock, and (v) 49,605 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 49,605 shares of Common Stock, for net proceeds of $4.0 million, after 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 $100.80 (less $0.0028 for each April 2025 Pre-Funded Warrant).

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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

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

Wainwright & Co., LLC (Wainwright), pursuant to which we may sell and issue, subject to the limitations in the Sales Agreement, shares up to $10.0 million of our Common Stock from time to time through Wainwright as our sales agent (the ATM Offering).

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.

On May 20, 2024, we entered into an At The Market Offering Agreement (the Sales Agreement) with Wainwright, pursuant to which we may sell and issue, subject to the limitations in the Sales Agreement, up to $10.0 million of shares of our Common Stock from time to time through Wainwright as our 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 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.

On January 30, 2026, we filed a prospectus supplement to our registration statement on Form S-3 (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 $60.0 million, which amount does not include the shares of Common Stock having an aggregate gross sales price of approximately $12.6 million that were sold under the ATM Offering through January 29, 2026, in accordance with the limitations set forth in Instruction I.B.6 of Form S-3.

As of March 31, 2026, we have sold 1,147,367 shares of our Common Stock in the ATM Offering at a weighted-average price of $11.32 per share, raising $13.0 million of gross proceeds and net proceeds of $12.4 million, after deducting commissions to the sales agent and other ATM Offering related expenses.

During the three months ended March 31, 2026, we sold 1,087,364 shares of Common Stock in the ATM Offering at a weighted average price of $6.27 per share for gross proceeds of $6.8 million and net proceeds of $6.5 million.

Financial Operations Overview

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We expect our general and administrative expenses will continue to increase as we incur costs associated with being a public company, including expenses related to services associated with maintaining compliance with The Nasdaq Capital Market and SEC requirements, directors’ and officers’ insurance, legal and accounting costs and investor relations costs, as well as an increase in personnel expenses as we hire additional personnel.

Warrant Liability

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 Accounting Standards Codification (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 precludes the May 2022 Warrants from being accounted for as components of equity.

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.

Interest Income

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Results of Operations

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 September 30,

Operating expenses:

Research and development $ 1,769 $ 1,125

General and administrative 1,596 1,005

Total operating expenses 3,365 2,130

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

Interest income 6 7

Net loss $ (3,359) $ (2,123)

Research and Development 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 $1.6 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 $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

Comparison of the Three Months Ended March 31, 2026 and 2025

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

Nine Months Ended September 30,

Three Months Ended March 31,

Operating expenses:

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Loss from operations (2,003) (3,051)

Change in fair value of warrant liability — 3

Interest income 5 5

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Research and Development 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.

Research and development expenses were $0.4 million and $1.6 million for the three months ended March 31, 2026 and 2025, respectively.

The $1.2 million decrease in research and development expenses was primarily due to a decrease of $1.1 million in expenses related to the registration development program of GRI-0621 due to the completion of the Phase 2a clinical trial and a $0.1 million decrease in consulting fees.

General and Administrative Expenses

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 nine months ended September 30, 2024.

General and administrative expenses were $1.6 million and $1.4 million for the three months ended March 31, 2026 and 2025, respectively.

The $0.2 million increase was primarily related to a $0.1 million decrease in personnel expenses, including stock-based compensation expenses, offset by a $0.4 million increase in public company expenses.

Interest Income

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

Interest income was $5,000 in each of the three months ended March 31, 2026 and 2025.

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 $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 incurred net losses of $2.0 million and $3.0 million for the three months ended March 31, 2026 and 2025, respectively.

As of March 31, 2026, we had an accumulated deficit of $53.7 million.

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

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

As of March 31, 2026, we had $11.0 million in cash.

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

Nine Months Ended September 30,

Three Months Ended March 31,

Net cash provided by (used in):

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Financing activities 6,504 (11)

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

Net increase (decrease) in cash and cash equivalents $ 2,819 $ (1,747)

Cash Flows from Operating Activities

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.

For the three months ended March 31, 2026 and 2025, $3.7 million and $1.7 million were used in operating activities, respectively.

The $1.9 million increase was primarily due to a $1.8 million increase in cash used for accounts payable, a $0.9 million increase in cash used for accrued expenses, a $0.2 million increase in non-cash adjustments, primarily related to stock-based compensation expenses, and $0.1 million decrease in cash used for prepaid and other assets and operating lease liabilities, offset by a $1.0 million decrease in net loss.

Cash Flows from Financing Activities

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.

Net cash provided by financing activities was $6.5 million for the three months ended March 31, 2026 and was primarily related to $6.8 million in proceeds from the ATM Offering, offset by $0.3 million of stock issuance costs.

Net cash used in financing activities was $11,000 for the three months ended March 31, 2025 and was primarily related to the payment of stock issuance costs related to the April 2025 Purchase Agreement.

December 2025 Securities Purchase Agreement

On December 11, 2025, we entered the December 2025 Purchase Agreement, pursuant to which we issued and sold, in the December 2025 Offering, (i) 92,976 December 2025 Shares, (ii) 287,977 December 2025 Pre-Funded Warrants exercisable for an aggregate of 287,977 shares of Common Stock, and (iii) 380,962 Series F Common Warrants to purchase up to 380,962 shares of Common Stock, for net proceeds of $6.3 million, after deducting offering expenses of $1.7 million.

April 2025 Securities Purchase Agreement

On April 1, 2025, we entered the April 2025 Purchase Agreement, pursuant to which we issued and sold, in the April 2025 Offering, (i) 7,214 April 2025 Shares, (ii) 42,389 April 2025 Pre-Funded Warrants exercisable for an aggregate of 42,389 shares of Common Stock, (iii) 49,605 Series E-1 Common Warrants to purchase up to 49,605 shares of Common Stock, (iv) 49,605 Series E-2 Common Warrants to purchase up to 49,605 shares of Common Stock, and (v) 49,605 Series E-3 Common Warrants, to purchase up to 49,605 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.

February 2024 Securities Purchase Agreement

On February 1, 2024, we entered into securities purchase agreement , pursuant to which we issued and sold, in a public offering (the February 2024 Offering), (i) 1,495 shares of Common Stock, (ii) 21,131 pre-funded warrants exercisable for an aggregate of 21,131 shares of Common Stock, (iii) 22,631 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 exercisable for an aggregate of 22,631 shares of Common Stock for net proceeds of $4.4 million, after deducting offering expenses of $1.1 million

On January 30, 2026, we filed a prospectus supplement to our registration statement on Form S-3 (File No.

the shares of Common Stock having an aggregate gross sales price of approximately $12.6 million that were sold under the ATM Offering through January 29, 2026, in accordance with the limitations set forth in Instruction I.B.6 of Form S-3.

Future Funding Requirements

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.

Our net losses were $2.0 million and $3.0 million for the three months ended March 31, 2026 and 2025, respectively.

As of March 31, 2026, we had $11.0 million in cash and an accumulated deficit of $53.7 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 first quarter of 2026.

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 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.

Based on our current operating plan, we believe that our existing cash and cash equivalents will be sufficient to fund our currently planned operating expenses and capital expenditure requirements into the second quarter of 2027.

In particular, these estimates assume only the continuation of preliminary work towards the initiation of a Phase 2b trial of GRI-0621;

we would require substantial additional capital or resources in order to complete a Phase 2b clinical trial of GRI-0621.

We intend to raise capital through additional issuances of equity securities and/or short-term or long-term debt arrangements, and potentially through strategic partner and collaboration agreements, but there can be no assurances any such financing, collaborations or partnering opportunities will be available when needed on acceptable terms, or at all, even if our research and development efforts are successful.

If we are unable to secure adequate additional funding when needed or on acceptable terms, 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.

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What changed 10-Q

Item 2. Management’s Discussion and Analysis