UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-39538 GRAYBUG VISION, INC. (Exact name of Registrant as specified in its Charter) Delaware 45-2120079 (State or other jurisd ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-39538 GRAYBUG VISION, INC. (Exact name of Registrant as specified in its Charter) Delaware 45-2120079 (State or other jurisdictio ...

PART I—FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements.) Unaudited condensed financial statements for Q1 2021 show decreased cash and total assets, increased accumulated deficit, and a larger net loss compared to Q1 2020 Condensed Balance Sheet Data (in thousands) | Metric | March 31, 2021 (unaudited) | December 31, 2020 | | :--- | :--- | :--- | | Cash and cash equivalents | $10,589 | $33,418 | | Total current assets | $88,821 | $99,240 | | Total assets | $90,852 | $101,794 | | Total liabilities | $6,290 | $7,008 | | Accumulated deficit | $(144,816) | $(133,367) | | Total stockholders' equity | $84,562 | $94,786 | Condensed Statements of Operations (in thousands, except per share data) | Metric | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :--- | :--- | :--- | | Research and development | $6,448 | $6,085 | | General and administrative | $5,040 | $1,711 | | Total operating expenses | $11,488 | $7,796 | | Loss from operations | $(11,488) | $(7,796) | | Net loss | $(11,449) | $(7,794) | | Net loss per common share | $(0.54) | $(6.61) | Condensed Statements of Cash Flows (in thousands) | Metric | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :--- | :--- | :--- | | Net cash used in operating activities | $(9,264) | $(10,711) | | Net cash (used in) provided by investing activities | $(13,657) | $16,853 | | Net cash provided by (used in) financing activities | $92 | $(840) | | Net (decrease) increase in cash and cash equivalents | $(22,829) | $5,302 | [Notes to the Condensed Financial Statements](index=9&type=section&id=Notes%20to%20the%20Condensed%20Financial%20Statements) Notes detail the company's organization, IPO, going concern, and accounting policies, highlighting the **$92.0 million** IPO proceeds and cash sufficiency for **12 months** after pausing GB-102 trials - In September 2020, the company completed its IPO, raising net proceeds of **$92.0 million**[34](index=34&type=chunk) - The company has an accumulated deficit of **$144.8 million** as of March 31, 2021. Management believes its existing cash will fund operations for more than **12 months**, largely due to the decision in March 2021 to not proceed with the significant investment required for two Phase 3 clinical trials for GB-102[36](index=36&type=chunk)[37](index=37&type=chunk)[38](index=38&type=chunk) - As of March 31, 2021, the company had approximately **$3.1 million** in commitments with CROs and CMOs due within three to 12 months. During the quarter, the company terminated several contracts, resulting in the cancellation of **$3.7 million** in commitments and recognizing **$2.2 million** in related expenses[56](index=56&type=chunk) - Total unrecognized stock-based compensation expense related to unvested stock awards was **$13.4 million** as of March 31, 2021, expected to be recognized over a weighted-average term of **3.3 years**[66](index=66&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=16&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) Management discusses GB-102's clinical-stage status requiring partner funding, analyzes increased Q1 2021 net loss from higher G&A, and notes current cash for **12 months** but future financing needs [Overview](index=16&type=section&id=Overview) Graybug, a clinical-stage biopharmaceutical company, requires partner funding for its lead candidate GB-102, reporting a **$11.4 million** net loss for Q1 2021 and **$144.8 million** accumulated deficit - The company's lead product candidate, GB-102, requires funding by a partner for further clinical trials following the analysis of Phase 2b trial data[73](index=73&type=chunk) Financial Position as of March 31, 2021 | Metric | Amount (in millions) | | :--- | :--- | | Net Loss (Q1 2021) | $11.4 | | Accumulated Deficit | $144.8 | | Cash, cash equivalents and short-term investments | $85.7 | [Results of Operations](index=19&type=section&id=Results%20of%20Operations) Net loss increased to **$11.4 million** in Q1 2021 from **$7.8 million** in Q1 2020, primarily due to a **195%** rise in G&A expenses, including a **$1.35 million** write-off Comparison of Operating Results (in thousands) | Metric | Q1 2021 | Q1 2020 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Research and development | $6,448 | $6,085 | $363 | 6% | | General and administrative | $5,040 | $1,711 | $3,329 | 195% | | **Total operating expenses** | **$11,488** | **$7,796** | **$3,692** | **47%** | | **Net loss** | **$(11,449)** | **$(7,794)** | **$(3,655)** | **47%** | - The increase in R&D expenses was mainly due to fees from canceling clinical supply orders for the GB-102 Phase 3 trial and higher compensation costs, partially offset by lower clinical trial expenses as the Phase 2b treatment phase completed in December 2020[97](index=97&type=chunk) - The sharp increase in G&A expenses was primarily due to a **$1.35 million** write-off of deposits on fixed assets purchase commitments, higher stock-based compensation, increased headcount, and higher directors and officers insurance costs after becoming a public company[99](index=99&type=chunk)[100](index=100&type=chunk) [Liquidity and Capital Resources](index=20&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2021, the company held **$85.7 million** in cash, sufficient for over **12 months** due to pausing GB-102 Phase 3 trials, but requires additional financing for R&D programs - As of March 31, 2021, the company had **$85.7 million** in available cash, cash equivalents, and short-term investments and an accumulated deficit of **$144.8 million**[103](index=103&type=chunk) - The company believes its existing cash will fund operations for over **12 months**, as the current operating plan no longer includes the cost of commencing Phase 3 clinical trials for GB-102 in 2021[105](index=105&type=chunk) - The company will require additional financing to advance its product candidates and will seek funds through equity offerings, debt financings, or collaborations, but may be unable to raise capital on favorable terms, if at all[108](index=108&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=25&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk.) As a smaller reporting company, Graybug Vision, Inc. is not required to provide quantitative and qualitative disclosures about market risk - As a smaller reporting company, Graybug Vision, Inc. is not required to provide quantitative and qualitative disclosures about market risk[128](index=128&type=chunk) [Item 4. Controls and Procedures](index=25&type=section&id=Item%204.%20Controls%20and%20Procedures.) Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2021, with no material changes in internal control over financial reporting during the quarter - Management concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report (March 31, 2021)[129](index=129&type=chunk) - There were no changes in internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[130](index=130&type=chunk) PART II—OTHER INFORMATION [Item 1. Legal Proceedings](index=26&type=section&id=Item%201.%20Legal%20Proceedings.) The company is not a party to any material legal proceedings as of the filing date - As of the filing date, the company is not party to any material legal proceedings[133](index=133&type=chunk) [Item 1A. Risk Factors](index=26&type=section&id=Item%201A.%20Risk%20Factors.) The company faces significant risks including its clinical-stage status, substantial losses, need for additional funding, heavy reliance on GB-102 requiring a partner, and challenges in development, regulatory approval, and intellectual property [Risks Related to Financial Position and Need For Additional Capital](index=28&type=section&id=Risks%20Related%20to%20Our%20Financial%20Position%20and%20Need%20For%20Additional%20Capital) As a clinical-stage company with no approved products, the company has **$144.8 million** in accumulated losses, expects increasing losses, and requires substantial additional funding to avoid development delays - The company has incurred significant operating losses since inception, with an accumulated deficit of **$144.8 million** as of March 31, 2021, and expects to incur continued and increasing losses[142](index=142&type=chunk) - The company requires substantial additional funding to support its operations. If unable to raise capital when needed, it could be forced to delay, reduce, or eliminate product development or commercialization efforts[148](index=148&type=chunk) [Risks Related to Product Development, Regulatory Approval and Commercialization](index=30&type=section&id=Risks%20Related%20to%20Product%20Development%2C%20Regulatory%20Approval%20and%20Commercialization) Product development, regulatory approval, and commercialization risks include GB-102's unproven approach, the need for partner funding, potential clinical trial failures, and challenges in market acceptance - The company requires a partner to fund any further clinical trials of GB-102 for wet AMD. Without such a partnership, further development of GB-102 for wet AMD or DME, and GB-103 for diabetic retinopathy, is unlikely[166](index=166&type=chunk) - The Phase 2b clinical trial of GB-102 showed a lower average Best Corrected Visual Acuity (BCVA) compared to the Eylea control arm. If repeated in a Phase 3 trial, it is unlikely the FDA would approve the product based on non-inferiority[177](index=177&type=chunk) - The active ingredient in GB-102, sunitinib, has a boxed warning for liver damage (hepatotoxicity) in its approved oncology indications, which may complicate regulatory approval or market acceptance, even though no such toxicity has been observed in the company's trials[201](index=201&type=chunk)[202](index=202&type=chunk) [Risks Related to Manufacturing](index=41&type=section&id=Risks%20Related%20to%20Manufacturing) Reliance on third-party CMOs for product candidate manufacturing poses risks in quality control, regulatory compliance, and supply chain, with no commercial-scale experience, potentially delaying development and commercialization - The company currently relies on third parties for the production of its product candidates, which creates risks related to lack of direct control over regulatory compliance and quality assurance[213](index=213&type=chunk)[214](index=214&type=chunk) - The company has no experience manufacturing its product candidates at a commercial scale and may be unable to successfully scale up manufacturing in sufficient quality and quantity, which would delay or prevent development and commercialization[221](index=221&type=chunk) [Risks Related to Intellectual Property](index=50&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) Success depends on obtaining and maintaining patent protection, facing risks of challenges, non-infringing alternatives, sunitinib patent expiration in **2021**, and potential termination of the Johns Hopkins University license - The company's ability to protect its product candidates depends on obtaining and maintaining valid and enforceable patents, which is an uncertain process involving complex legal and factual questions[268](index=268&type=chunk) - Sunitinib, the active ingredient in GB-102 and GB-103, is expected to lose patent protection in **2021**, which could allow new competitors with similar products to challenge the company's business[285](index=285&type=chunk) - The company's licensed patents from Johns Hopkins University, developed with U.S. government funding, are subject to federal regulations, including potential "march-in" rights that could allow the government to grant licenses to third parties[282](index=282&type=chunk) [Risks Related to Ownership of Our Common Stock](index=69&type=section&id=Risks%20Related%20to%20Ownership%20of%20Our%20Common%20Stock) Risks for common stock ownership include price volatility, dilution from future equity, significant control by principal stockholders (**~79%**), and reduced disclosure as an "emerging growth" and "smaller reporting" company, with no anticipated dividends - The market price of the company's stock may be volatile due to factors such as clinical trial results, regulatory developments, and market conditions[385](index=385&type=chunk) - As of March 31, 2021, executive officers, directors, and 5% or greater stockholders beneficially owned approximately **79%** of the company's voting stock, giving them significant control over corporate actions[395](index=395&type=chunk) - The company is an "emerging growth company" and a "smaller reporting company," which allows it to take advantage of reduced reporting requirements, potentially making its common stock less attractive to investors[397](index=397&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=74&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds.) No unregistered sales of equity securities occurred, and **$92.0 million** net IPO proceeds are being used as described in the prospectus with no material changes - The company received net proceeds of approximately **$92.0 million** from its IPO in September/October 2020[413](index=413&type=chunk) - There has been no material change in the planned use of proceeds from the IPO as described in the prospectus[414](index=414&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission File Number 001-39538 GRAYBUG VISION, INC. (Exact name of Registrant as specified in its Charter) Delaware 452120079 (State or other jurisdiction of ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to | --- | --- | --- | |---------------------------------------------------------------------------------------|------------------------------------------ ...