PART I. FINANCIAL INFORMATION Item 1. Financial Statements This section presents GRI Bio, Inc.'s unaudited interim consolidated financial statements for Q1 2024, highlighting net loss and equity changes Consolidated Balance Sheets Total assets increased to $4.6 million by March 31, 2024, with decreased liabilities and significantly improved equity Consolidated Balance Sheet Highlights (in thousands) | Metric | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $4,091 | $1,808 | | Total current assets | $4,428 | $2,934 | | Total assets | $4,587 | $2,956 | | Liabilities & Stockholders' Equity | | | | Total current liabilities | $1,680 | $2,697 | | Total liabilities | $1,789 | $2,697 | | Total stockholders' equity | $2,798 | $259 | | Total liabilities and stockholders' equity | $4,587 | $2,956 | Consolidated Statements of Operations Net loss decreased to $1.9 million in Q1 2024 due to lower interest expense, despite increased R&D costs Consolidated Statements of Operations (in thousands, except per share data) | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Research and development | $933 | $116 | | General and administrative | $962 | $872 | | Total operating expenses | $1,895 | $988 | | Loss from operations | ($1,895) | ($988) | | Interest income (expense), net | $6 | ($1,162) | | Net loss | ($1,887) | ($2,150) | | Net loss per share, basic and diluted | ($0.46) | ($15.04) | Consolidated Statements of Cash Flows Cash used in operations increased to $2.2 million in Q1 2024, offset by $4.5 million from financing, for a $2.3 million net increase Consolidated Statements of Cash Flows Highlights (in thousands) | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Cash used in operating activities | ($2,203) | ($579) | | Cash provided by financing activities | $4,486 | $1,030 | | Net increase in cash and cash equivalents | $2,283 | $451 | | Cash and cash equivalents at end of period | $4,091 | $460 | Notes to Unaudited Interim Consolidated Financial Statements Notes detail business, liquidity, and accounting policies, highlighting a public offering and going concern doubt - The company is a clinical-stage biopharmaceutical firm focused on diseases related to dysregulated immune responses. Its lead product candidate is GRI-0621 for idiopathic pulmonary fibrosis (IPF)20 - In February 2024, the company raised net proceeds of $4.4 million ($4,389 thousand after deducting $1,110 thousand in expenses) through a public offering of common stock, pre-funded warrants, and common warrants2761 - Management has concluded there is substantial doubt about the company's ability to continue as a going concern for one year, as existing cash is only sufficient to fund operations into the third quarter of 20242930 - The April 2023 merger with Vallon Pharmaceuticals was accounted for as a reverse recapitalization, with GRI Operations as the accounting acquirer2144 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses business, financing, Nasdaq compliance, Q1 2024 results, and liquidity issues raising going concern doubt Overview GRI Bio is a clinical-stage biopharmaceutical company developing therapies for immune disorders, with lead candidate GRI-0621 in Phase 2a - Lead product candidate GRI-0621 is being developed for idiopathic pulmonary fibrosis (IPF). Enrollment for a Phase 2a biomarker study began in December 202377 - The company expects interim data from the GRI-0621 Phase 2a trial in Q3 2024 and topline results in Q4 202477 - The second product candidate, GRI-0803, is being developed for autoimmune disorders, with an initial focus on lupus (SLE). An IND filing is planned for the second half of 202478 Recent Developments Recent developments include a $4.4 million public offering, a reverse stock split, and ongoing Nasdaq compliance challenges - On February 1, 2024, the company raised net proceeds of $4.4 million through a public offering of stock and warrants80 - A 1-for-7 reverse stock split was effected on January 29, 2024, to address Nasdaq compliance82 - The company received a Nasdaq deficiency notice for not meeting the $2.5 million minimum stockholders' equity requirement. While compliant as of March 31, 2024, the company notes the proceeds will likely be insufficient to maintain long-term compliance8485 - The company also received a Nasdaq bid price deficiency notice for its stock trading below $1.00. The reverse stock split did not resolve this, and the company has until July 3, 2024, to regain compliance86 Results of Operations Net loss decreased to $1.9 million in Q1 2024 from $2.2 million in Q1 2023, driven by lower interest expense despite increased R&D Comparison of Operations (in thousands) | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Research and development | $933 | $116 | | General and administrative | $962 | $872 | | Interest income (expense) | $6 | ($1,162) | | Net loss | ($1,887) | ($2,150) | - The $0.8 million increase in R&D expenses was mainly due to a $0.5 million increase in costs for the GRI-0621 program99 Liquidity and Capital Resources As of March 31, 2024, the company had $4.1 million cash, but reserves are only sufficient into Q3 2024, raising going concern doubt - As of March 31, 2024, the company had $4.1 million in cash and an accumulated deficit of $33.4 million105112 - Based on the current operating plan, existing cash and cash equivalents are projected to fund operations only into the third quarter of 2024113 - The company needs to raise substantial additional capital and acknowledges there is substantial doubt about its ability to continue as a going concern. Failure to secure funding may force it to delay, scale back, or cease operations114 Item 3. Quantitative and Qualitative Disclosures About Market Risk This disclosure is not applicable as the company qualifies as a smaller reporting company - Not applicable to a smaller reporting company120 Item 4. Controls and Procedures Management concluded disclosure controls were effective as of March 31, 2024, with no material changes to internal controls - The Chief Executive Officer and Chief Financial Officer concluded that as of March 31, 2024, the company's disclosure controls and procedures were effective124 - No material changes to the company's internal control over financial reporting occurred during the first quarter of 2024125 PART II. OTHER INFORMATION Item 1. Legal Proceedings The company is not currently involved in any material legal proceedings, nor aware of any pending or threatened actions - The company reports no material legal proceedings127 Item 1A. Risk Factors No material changes have occurred to the risk factors previously disclosed in the company's Annual Report on Form 10-K - No material changes from the risk factors disclosed in the Annual Report128 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales or issuer purchases of equity securities during the period - None reported129 Item 5. Other Information No directors or officers adopted or terminated Rule 10b5-1 trading arrangements during Q1 2024 - No directors or officers adopted or terminated Rule 10b5-1 trading arrangements during the quarter132 Item 6. Exhibits This section lists exhibits filed with the Form 10-Q, including officer certifications and interactive data files
VALLON PHARMACEU(VLON) - 2024 Q1 - Quarterly Report