What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-14 compared with 2026-05-13 · 77 added, 35 removed, 154 unchanged (42% of the section changed)

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

Our product candidate, GRI-0621, which received Orphan Drug Designation from the U.S.

Food and Drug Administration (FDA) on June 18, 2026 for the treatment of IPF, 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.

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.

While there are no approved oral formulations of tazarotene, as of June 30, 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.

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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.

The primary endpoint for this Phase 2a trial was safety and tolerability of oral GRI-0621, administered as a single daily dose, 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;

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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.

Results from this Phase 2a trial are being used to determine safety sample size, clinically relevant endpoints and clinical trial duration in communication with the FDA in designing future trials.

The Company recently requested a Type C meeting to discuss clinical study plans for the GRI-0621 IPF program with the FDA and received written feedback from the agency in response.

Equipped with the FDA’s feedback, the Company is evaluating its clinical development strategy for GRI-0621 and intends to request another meeting with the FDA to obtain the FDA’s views on a proposed Phase 2b/3 adaptive trial design.

There can be no assurance that the FDA will agree to any such proposed trial design or that the Company will be able to obtain the substantial additional capital or resources necessary to conduct additional clinical studies for GRI-0621.

On June 18, 2026, the FDA granted Orphan Drug Designation to GRI-0621 for the treatment of IPF.

Orphan Drug Designation is granted to therapies intended to treat rare diseases affecting fewer than 200,000 people in the United States and provides important development and commercialization benefits, including potential eligibility for seven years of U.S.

market exclusivity upon approval, potential tax credits related to qualified clinical development expenses, and waiver of the FDA application fee.

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

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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 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 the first half of 2027.

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.

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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.

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 of Directors 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 Amended and Restated Certificate of Incorporation, as amended, 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.

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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.

FDA Orphan Drug Designation

On June 18, 2026, the FDA granted Orphan Drug Designation to GRI-0621 for the treatment of IPF.

Orphan Drug Designation is granted to therapies intended to treat rare diseases affecting fewer than 200,000 people in the United States.

The designation provides important development and commercialization benefits, including potential eligibility for seven years of U.S.

market exclusivity upon approval, potential tax credits related to qualified clinical development expenses, and waiver of the FDA application fee.

December 2025 Securities Purchase Agreement

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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.

As of June 30, 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.

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The Series E-2 Common Warrants will expire on the 18-month anniversary of the date of issuance.

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

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

May 2024 At The Market Offering

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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.

As of June 30, 2026, we have sold 1,748,549 shares of our Common Stock in the ATM Offering at a weighted-average price of $8.22 per share, raising $14.4 million of gross proceeds and net proceeds of $13.7 million, after deducting commissions to the sales agent and other ATM Offering related expenses.

During the three months ended June 30, 2026, we sold 601,182 shares of Common Stock in the ATM Offering at a weighted average price of $2.32 per share for gross proceeds of $1.4 million and net proceeds of $1.3 million.

During the six months ended June 30, 2026, we sold 1,688,546 shares of Common Stock in the ATM Offering at a weighted average price of $4.86 per share for gross proceeds of $8.2 million and net proceeds of $7.9 million.

Financial Operations Overview

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Results of Operations

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

Comparison of the Three Months Ended June 30, 2026 and 2025

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

Three Months Ended March 31,

Three Months Ended June 30,

Operating expenses:

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Research and Development Expenses

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.

Research and development expenses were $0.4 million and $1.9 million for the three months ended June 30, 2026 and 2025, respectively.

The $1.5 million decrease in research and development expenses was primarily due to a decrease of $1.5 million in expenses related to the registration development program of GRI-0621 due to the completion of the Phase 2a clinical trial.

General and Administrative Expenses

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

General and administrative expenses were $1.2 million and $1.0 million for the three months ended June 30, 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 $0.2 million increase in public company expenses.

Interest Income

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

Interest income was $5,000 in each of the three months ended June 30, 2026 and 2025.

Comparison of the Six Months Ended June 30, 2026 and 2025

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

Six Months Ended June 30,

Operating expenses:

Research and development $ 767 $ 3,520

General and administrative 2,883 2,429

Total operating expenses 3,650 5,949

Loss from operations (3,650) (5,949)

Interest income 9 11

Net loss $ (3,641) $ (5,938)

Research and Development Expenses

Research and development expenses were $0.8 million and $3.5 million for the six months ended June 30, 2026 and 2025, respectively.

The $2.7 million decrease in research and development expenses was primarily due to a decrease of $2.6 million in expenses related to the development program of GRI-0621 as a result of the completion of the Phase 2a clinical trial.

General and Administrative Expenses

General and administrative expenses were $2.9 million and $2.4 million for the six months ended June 30, 2026 and 2025, respectively.

The $0.5 million increase was primarily related to an increase of $0.6 million in public company expenses offset by a $0.2 million decrease in personnel expenses, including stock-based compensation expense.

Interest Income

Interest income was $9,000 and $11,000 for the six months ended June 30, 2026 and 2025, 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 $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 incurred net losses of $3.6 million and $5.9 million for the six months ended June 30, 2026 and 2025, respectively.

As of June 30, 2026, we had an accumulated deficit of $55.3 million.

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

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

As of June 30, 2026, we had $10.9 million in cash.

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

Three Months Ended March 31,

Six Months Ended June 30,

Net cash provided by (used in):

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Financing activities 7,849 4,996

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

Net increase in cash and cash equivalents $ 2,718 $ 94

Cash Flows from Operating Activities

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.

For the six months ended June 30, 2026 and 2025, $5.1 million and $4.9 million were used in operating activities, respectively.

The $0.2 million increase was primarily due to a $1.7 million increase in cash used for accounts payable, a $0.5 million increase in cash used for accrued expenses, a $0.2 million decrease in non-cash adjustments, primarily related to stock-based compensation expenses, and $0.2 million decrease in cash used for prepaid and other assets and operating lease liabilities, offset by a $2.3 million decrease in net loss.

Cash Flows from Financing Activities

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.

Net cash provided by financing activities was $7.8 million for the six months ended June 30, 2026 and was primarily related to $8.2 million in proceeds from the ATM Offering, offset by $0.4 million of stock issuance costs.

Net cash provided by financing activities was $5.0 million for the six months ended June 30, 2025 and was primarily related to the $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.

December 2025 Securities Purchase Agreement

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May 2024 At The Market Offering

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.

Nasdaq Continued Listing Requirement

On July 22, 2026, the SEC’s Division of Trading and Markets, acting under delegated authority, approved a new Nasdaq continued listing requirement under which companies listed on The Nasdaq Capital Market must maintain a Market Value of Listed Securities (MVLS) of at least $5 million (the “MVLS Requirement”).

On July 29, 2026, the SEC stayed the approval order after receiving petitions for Commission-level review pursuant to Rule 431(e) of the SEC’s Rules of Practice, and the MVLS Requirement is not currently in effect.

If the MVLS Requirement becomes effective, a company whose MVLS remains below $5 million for 30 consecutive business days, would be subject to immediate suspension of trading in and commence delisting proceedings, with no cure or compliance period to stay the suspension of trading.

A company may appeal the delisting determination to the Nasdaq Hearings Panel (the Hearings Panel), but a timely request for a hearing will not automatically stay the suspension of trading.

The Hearings Panel may, in its discretion, grant an exception of up to 180 days for a company to demonstrate compliance with The Nasdaq Capital Market’s initial listing requirements.

As of the date of this Quarterly Report, our MVLS is less than $5 million.

If the MVLS Requirement becomes effective and our Common Stock were suspended and delisted from The Nasdaq Capital Market, our ability to

raise additional capital, including under the ATM Offering, would be materially and adversely affected.

See Part II, Item 1A, “Risk Factors.”

Future Funding Requirements

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.

Our net losses were $3.6 million and $5.9 million for the six months ended June 30, 2026 and 2025, respectively.

As of June 30, 2026, we had $10.9 million in cash and an accumulated deficit of $55.3 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 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.

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

However, this estimate assumes that we only continue the preliminary work towards the initiation of additional clinical studies of GRI-0621;

we would not be able to complete the additional clinical studies for GRI-0621, which will require substantial additional capital or resources.

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.

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We do not expect to generate product revenue unless and until we successfully complete development, obtain regulatory approval for and successfully commercialize our current, or any future, product candidates.

In addition, as described in Part II, Item 1A, “Risk Factors,” although the new MVLS continued listing requirement approved on July 22, 2026 has been stayed pending Commission-level review, our MVLS is currently less than $5 million.

If the requirement becomes effective and our Common Stock is suspended from trading or delisted from The Nasdaq Capital Market, our ability to raise capital under the ATM Offering or otherwise access the public markets would be impaired, which would further exacerbate the risks described above and our substantial doubt about our ability to continue as a going concern.

Off-Balance Sheet Arrangements

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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