(Mark One)

This Annual Report on Form 10-K contains estimates, projections and other information concerning our industry, our business and the markets for our drug candidates, including data regarding the estimated size of such markets and the incidence of certain medical conditions. We obtained the industry, market and similar data set forth in this reportAnnual Report from our internal estimates and research and from independent industry publications, governmental publications, reports by market research firms or other independent sources that we believe to be reliable sources. In some cases, we do not expressly refer to the sources from which this data is derived. Industry publications and third-party research, surveys and studies generally indicate that their information has been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. Our internal data and estimates are based upon information obtained from trade and business organizations and

Current IPF therapies slow the decline in lung function but do not anticipated,improve overall survival. Regulating iNKT cell activity and their ability to promote macrophage polarization, TGF-beta production, and activation of myofibroblasts suggests they may reduce fibrosis progression and lead to improved survival outcomes in IPF. Activated iNKT cells are significantly upregulated in IPF patients and have the potential to be an important pharmacodynamic biomarker for these patients. We have observed that activated iNKT cells increase in NASH patients as the disease progresses from healthy individuals to mild non-alcoholic fatty liver disease and advanced NASH and believe iNKT may be a similar biomarker for IPF patients (see Figure 5).

GRI has also identified several modulators of type 2 NKT cell activity, including cis-tetracosenoyl sulfatide (sulfatide), certain phospholipids, and GRI-0124. GRI-0803, as well as GRI’s library of over 500 compounds, are structurally related to GRI-0124. In vivo administration of GRI-0803 and GRI-0124 activates type 2 NKT cells and inhibits the expansion of activated iNKT cells. Together, we believe these data support a model of iNKT inhibitors, such as GRI-0621, and type 2 NKT modulators, such GRI-0803, as well as GRI-0124 and GRI-0729, working together to balance inflammatory immune responses.

We rely on third-party contract manufacturers to manufacture GRI-0621 for preclinical studies and clinical trials, and do not own manufacturing facilities for producing any preclinical study or clinical trial product supplies. We rely on a limited number of suppliers for drug product and engage a single manufacturer to produce our formulated GRI-0621 drug product for clinical studies, as is standard industry practice in early to mid-stage clinical development. If these suppliers are unable to supply to us in the quantities we require, or at all, or otherwise default on their supply obligations to us, we may not be able to obtain alternative supplies from other suppliers on acceptable terms, in a timely manner, or at all. In addition, if we are required to change manufacturers for any reason, we will be required to verify that the new manufacturer maintains facilities and procedures that comply with quality standards and with all applicable regulations and guidelines. We will also need to verify, such as through a manufacturing comparability study, that any new manufacturer or manufacturing process will produce our product candidate according to the specifications previously submitted to the FDA or another regulatory authority. We may be unsuccessful in demonstrating the comparability of clinical supplies which could electrequire the conduct of additional clinical trials. The delays associated with the verification of a new manufacturer could negatively affect our ability to continuedevelop product candidates in a timely manner or within budget.

In December 2023 we commenced enrollment for our Phase 2a trial. This trial will be a twelve-week, multicenter, multinational, randomized, placebo-controlled trial in approximately 36 patients with IPF. A 4.5 mg dose will be compared to operate our businessplacebo over twelve weeks of treatment in subjects with a confirmed diagnosis of IPF on background therapy. Subjects will complete a screening visit to evaluate their medical history, present condition, laboratory assessments, comorbidities, and pursue licensing or partnering transactions.concomitant medications. Based on these findings, subjects will be randomly assigned to one of two treatment arms: 4.5 mg of GRI-0621 or placebo in a 2:1 randomization. Weekly visits out to twelve weeks will evaluate safety, pharmacokinetics, and efficacy/mechanism of action of GRI-0621 as assessed by the activation of iNKT cells from both blood at weeks 6 and 12 and bronchi-alveolar lavage fluid at week 12. As a secondary endpoint, various biomarkers will also be evaluated to support the

Scientific studies have suggested that iNKT plays an important pathogenic role in kidney diseases, including acute kidney injury, ischemic reperfusion injury and lupus nephritis. Accordingly, iNKT cells were activated in peripheral blood of lupus patients (see Figure 4, above) and in spontaneous models of lupus. Notably, activation of type 2 NKT leads to a dendritic cell-mediated inhibition of iNKT cells. In our prior assessment, this would requirepreclinical studies, a type 2 NKT activating molecule, GRI-0803, was observed to inhibit both murine and human iNKT cells. Oral administration of GRI-0803, a type 2 NKT activating molecule, was observed to inhibit lupus nephritis and to significantly improve overall survival.

Following a weekly oral administration of GRI-0803 in a spontaneous model of lupus nephritis significant amountinhibition of time, financial resources, human capitalpro-inflammatory cytokines, including IL-17 and we wouldIL-6 (see Figure 12) was observed. Other fibrogenic molecules, including TGF-beta, were also observed to be subjectinhibited leading to allblocking of collagen deposition and renal fibrosis (see Figure 13). This was observed to be accompanied by inhibition of cellular infiltration (including B cells and T cells) into the riskkidney and uncertaintiesglomerular pathology. Furthermore, following GRI-0803 administration, significant inhibition of pathogenic anti-dsDNA antibodies, and proteinuria as measured in urine (see Figures 13 and 14) was observed. Additionally, GRI-0803 was observed to block activation of plasmacytoid dendritic cells and type I interferon signaling pathway genes involved in renal injury. Inhibition of renal disease was reflected in the improvement of overall survival of proteinuria-free animals.

There are several large biotechnology and biopharmaceutical companies that are currently pursuing the development of product candidates. In such instance, thereproducts for the treatment of conditions GRI is also targeting, or may target in the future, including IPF, SLE, MS, UC, PSC and NASH. While we know of no assuranceother companies currently in clinical development targeting NKT cells as a method of treating any of the above conditions, companies that we could raise sufficient capitalare aware of that are targeting the treatment of these diseases include large companies with significant financial resources such as:

The key competitive factors affecting the success of our product candidates are likely to support these efforts, thatbe efficacy, safety, cost, and convenience. Many of our competitors, either alone or with their collaborators, have significantly greater resources, established presence in the market, expertise in research and development, efforts would be successful or that we could successfully obtain themanufacturing, preclinical and clinical testing, obtaining regulatory approvals requiredand reimbursement and marketing approved products than we do. These competitors also compete with us in recruiting and retaining qualified scientific, sales, marketing, and management personnel, establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, market any product candidate we pursued.

We strive to pursue, maintain and defend patent rights developed internally and to protect the proprietary technology inventions and improvements that areinformation commercially or strategically important to the development of our business. We seek to obtain and maintain, patent rights intended to cover the technologies incorporated into, or used to produce, our therapeutic candidates, the compositions of matter of our therapeutic candidates and their methods of use and manufacture, as

To cover our proprietary technologies and our current pipeline of proprietary products and related methods, such as methods of use, we have filed patent applications representing six patent families. As of February 15, 2024, our patent estate included 12 issued United States patents, 2 United States pending non-provisional patent applications, 65 issued foreign patents and 16 foreign patent applications currently have three issued U.S. patentspending in various foreign jurisdictions.

Specifically, we own one patent family with claims directed to specific ADAIR formulations (i.e.GRI-0621, and related methods of using the same to treat diseases, e.g. inflammatory conditions. Three United States and 20 foreign patents (Australia, Brazil, Canada, China, Europe (validated in nine countries), compositionHong Kong, Japan, South Korea, Mexico, and Russia) were granted in this family. Patent applications in this family are pending in multiple jurisdictions, including, for example, the European Patent Organization, China, Japan, and Korea. Patents in this patent family are expected to expire in 2032, absent any patent term adjustments or extensions.

We also own one patent family with claims directed to GRI-0803 and related methods of matter)using the same to treat diseases. Three United States and nine foreign patents (Canada, Europe (validated in seven countries), and Hong Kong) were granted in this family. Patent applications in this family are pending in the United States and European Patent Organization. Patents in this patent family are expected to expire in 2032, absent any patent term adjustment or extension.

Additionally, we own one patent family relating to GRI-0729 and related methods of using the same to treat diseases. Four United States and 13 foreign patents (Canada, Europe (validated in 11 countries), and Hong Kong) have been granted in this family. Patents in this patent family are expected to expire in 2032, absent any patent term adjustment or extension.

We also own one patent family with claims directed to GRI-0124 and related methods of using the same to treat diseases. Fourteen foreign patents (Taiwan, Australia, China, Europe (validated in seven countries), Hong Kong, Israel, Mexico and Russia) were granted in this family. Patent applications in this family are pending, for example, in the United States, United Arab Emirates, Brazil, China, Japan, Russia, Canada, Hong Kong and South Korea. Patents in this patent applicationfamily are expected to expire in 2035, absent any patent term adjustment or extension.

The term of individual patents depends upon the laws of the countries in which they are obtained. In most countries in which we file, the patent term is 20 years from the earliest date of filing of a non-provisional patent application. However, the term of United States patents may be extended for ADAIRdelays incurred due to compliance with the FDA requirements or by delays encountered during prosecution that are caused by the United States Patent and Trademark Office (USPTO). For example, the Hatch-Waxman Act, permits a patent term extension for FDA-approved drugs of up to five years beyond the expiration of the patent. The length of the patent term extension is related to the length of time the drug is under examinationregulatory review. Patent extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval, and only one patent applicable to an approved drug may be extended. Similar provisions are available in Europe and other jurisdictions to extend the term of a patent that covers an approved drug. In the future, if and when our therapeutic candidates receive FDA approval, we expect to apply for patent term extensions on patents covering those therapeutic candidates. We intend to seek patent term extensions in any jurisdiction where these are available and where we also have a patent that may be eligible; however there is no guarantee that the applicable authorities, including the USPTO and FDA, will agree with our assessment of whether such extensions should be granted, and even if granted, the U.S. PTO. The U.S. patents will expire in 2037. We have two issued European patents and one issued Japanese patent which expire in 2038. Our international PCT application has entered national phase is under examination in several foreign countries and territories, including Australia, Canada and China. We also rely on know-how relating to our proprietary technology and product candidates and continuing innovation to develop, strengthen and maintain our proprietary position. We also planlength of such extensions.

Further, we expect to rely on data exclusivity, market exclusivity, patent term adjustment and patent term extensions when available.

As of January 31, 2020, the United Kingdom is no longer a member state of the EU, and therefore a separate marketing authorization application and approval will be required to market a medicinal product in the United Kingdom. The Medicines and Healthcare products Regulatory Agency (the MHRA) is the United Kingdom’s standalone pharmaceutical regulator.

prior Clinical Trials Directive 2001/20/EC. The extent to which ongoing clinical trials will be governed by the Clinical Trials Regulation will depend on the duration of the individual clinical trial; if a clinical trial continues for more than three years from the day on which the Clinical Trials Regulation becomes applicable the Clinical Trials Regulation will at that time begin to apply to the clinical trial. In addition, use of the new EU-wide application procedure being implemented via the Clinical Trial Information System (CTIS), became mandatory for new clinical trial application submissions as of February 4,1, 2023.

In April 2023, we had two full-time employeethe European Commission issued a proposal that will revise and hadreplace the existing general pharmaceutical legislation. If adopted and implemented as currently proposed, these revisions will significantly change several aspects of drug development and approval in the EU.

All establishments engaged five consultants. Wein the fabrication, packaging/labeling, importation, distribution, and wholesale of drugs and operation of a testing laboratory relating to drugs are required to hold a Drug Establishment License to conduct one or more of the licensed activities unless expressly exempted under the Food and Drug Regulations. The basis for the issuance of a Drug Establishment License is to ensure the facility complies with cGMPs as stipulated in the Food and Drug Regulations and as determined by cGMP inspection conducted by Health Canada. An importer of pharmaceutical products manufactured at foreign sites must also be able to demonstrate that the foreign sites comply with cGMPs, and such foreign sites are included on the importer’s Drug Establishment License.

presently restrict imports of products from countries where they may be sold at lower prices than in the United States. In the United States, third-party payors often rely upon Medicare coverage policy and payment limitations in setting their own reimbursement policies, but they also have no collective bargainingtheir own methods and approval process apart from Medicare coverage and reimbursement determinations. Accordingly, one third-party payor’s determination to provide coverage for a product does not assure that other payors will also provide coverage for the product.

Further, in August 2022, President Biden signed into the law the Inflation Reduction Act of 2022 (the IRA). Among other things, the IRA has multiple provisions that may impact the prices of drug products that are both sold into the Medicare program and throughout the United States. A manufacturer of drugs covered by Medicare Parts B or D must now pay a rebate to the federal government if their drug product’s price increases faster than the rate of inflation. This calculation is made on a drug product by drug product basis and the amount of the rebate owed to the federal government is directly dependent on the volume of a drug product that is paid for by Medicare Parts B or D. Additionally, starting for payment year 2026, CMS will negotiate drug prices annually for a select number of single source Part D drugs without generic or biosimilar competition. CMS will also negotiate drug prices for a select number of Part B drugs starting for payment year 2028. If a drug product is selected by CMS for negotiation, it is expected that the revenue generated from such drug will decrease. CMS has begun to implement these new authorities and entered into agreements to conduct price negotiations with our employeespharmaceutical manufacturers in October 2023. However, the impact of this program on the biopharmaceutical industry in the United States remains uncertain, in part because multiple large pharmaceutical companies and noneother stakeholders (e.g., the U.S. Chamber of Commerce) have initiated federal lawsuits against CMS arguing the program is unconstitutional for a variety of reasons, among other complaints. Those lawsuits are representedcurrently ongoing.

Health Technology Assessment (HTA) of medicinal products is becoming an increasingly common part of the pricing and reimbursement procedures in some EU Member States, including France, Germany, Ireland, Italy and Sweden. The HTA process in the EU Member States is governed by labor unions. We considerthe national laws of these countries. HTA is the procedure according to which the assessment of the public health impact, therapeutic impact, and the economic and societal impact of the use of a given medicinal product in the national healthcare systems of the individual country is conducted. HTA generally focuses on the clinical efficacy and effectiveness, safety, cost, and cost-effectiveness of individual medicinal products as well as their potential implications for the healthcare system. Those elements of medicinal products are compared with other treatment options available on the market. The outcome of HTA regarding specific medicinal products will often influence the pricing and reimbursement status granted to these medicinal products by the competent authorities of individual EU Member States. The extent to which pricing and reimbursement decisions are influenced by the HTA of the specific medicinal product vary between the EU Member States. For example, EU Member States that have not yet developed HTA mechanisms could rely to some extent on the HTA performed in countries with a developed HTA framework when adopting decisions concerning the pricing and reimbursement of a specific medicinal product.

Separately from cost containment efforts, in the United States and some foreign jurisdictions, there also have been, and continue to be, several legislative and regulatory changes and proposed changes regarding the healthcare system that could prevent or delay marketing approval of product candidates or restrict or regulate post-approval activities. For example, in April 2023 the European Commission issued a proposal for anew Directive and a new Regulation, which will revise and replace the existing general pharmaceutical legislation. If adopted and implemented as currently proposed, these revisions will significantly change several aspects of drug development and approval in the EU. The FDA’s and other regulatory authorities’ policies may change, and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our current relations with our employees to be good.or future product candidates.

We are subject to laws and regulations governing data privacy and the protection of personal information including health information. The legislative and regulatory landscape for privacy and data protection continues to evolve, and there has been an increasing focus on privacy and data protection issues which will continue to affect our business. In the United States, we may be subject to state security breach notification laws, state laws protecting the privacy of health and personal information and federal and state consumer protections laws that regulate the collection, use, disclosure and transmission of personal information. These laws overlap and often conflict and each of these laws is subject to varying interpretations by courts and government agencies, creating complex compliance issues. If we fail to comply with applicable laws and regulations, we could be subject to penalties or sanctions, including criminal penalties. Our customers and research partners must comply with laws governing the privacy and security of health information, including HIPAA and state health information privacy laws. If we knowingly obtain health information that is protected under HIPAA, called “protected health information,” our customers or research collaborators may be subject to enforcement, and we may have direct liability for the unlawful receipt of protected health information or for aiding and abetting a HIPAA violation.

Relatedly, following Brexit and the expiry of the Brexit transition period, which ended on December 31, 2020, the EU GDPR has been implemented in the United Kingdom (as the UK GDPR). The UK GDPR sits alongside the United Kingdom Data Protection Act 2018 which implements certain derogations in the EU GDPR into United Kingdom law. Under the UK GDPR, companies not currentlyestablished in the United Kingdom but who process personal data in relation to the offering of goods or services to individuals in the United Kingdom , or to monitor their behavior will be subject to the UK GDPR – the requirements of which are (at this time) largely aligned with those under the GDPR and as such, may lead to similar compliance and operational costs with potential fines of up to £17.5 million or 4% of global turnover.

In general, the Foreign Corrupt Practices Act of 1977, as amended (FCPA), prohibits offering to pay, paying, promising to pay, or authorizing the payment of money or anything of value to a partyforeign official in order to influence any act or decision of the foreign official in his or her official capacity or to secure any other improper advantage in order to obtain or retain business for or with, or in order to direct business to, any legal proceedings.person. The prohibitions apply not only to payments made to “any foreign official,” but also those made to “any foreign political party or official thereof,” to “any candidate for foreign political office” or to any person, while knowing that all or a portion of the payment will be offered, given, or promised to anyone in any of the foregoing categories. “Foreign officials” under the FCPA include officers or employees of a department, agency, or instrumentality of a foreign government. The term “instrumentality” is broad and can include state-owned or state-controlled entities. Importantly, United States authorities deem most healthcare professionals and other employees of foreign hospitals, clinics, research facilities and medical schools in countries with public healthcare and/or public education systems to be “foreign officials” under the FCPA. When we interact with foreign healthcare professionals and researchers in testing and marketing our products abroad, should any of our product candidates receive foreign regulatory approval in the future, we must have policies and procedures in place sufficient to prevent us and agents acting on our behalf from providing any bribe, gift or gratuity, including excessive or lavish meals, travel or entertainment in connection with marketing our products and services or securing required permits and approvals. The FCPA also obligates companies whose securities are listed in the United States to comply with accounting provisions requiring us to maintain books and records that accurately and fairly reflect all transactions

We wereVallon Pharmaceuticals, Inc. (Vallon) was incorporated under the laws of the State of Delaware in January 2018, and completed ourits organization, formation and initial capitalization activities effective in June 2018. GRI Bio Operations, Inc. (GRI Operations), formerly known as GRI Bio, Inc., was incorporated under the laws of the State of Delaware in May 2009 under the name Glycoregimmune, Inc., and amended its certificate of incorporation to change its name to GRI Bio, Inc. on July 29, 2015.

Our telephone number is 267-607-8255, andprincipal executive offices are located at 2223 Avenida De La Playa #208, La Jolla, CA 92037.

We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended (the Securities Act), as modified by the Jumpstart Our Business Startups Act of 2012 (the JOBS Act). Emerging and may remain an emerging growth companies can delay adopting new or revised accounting standards until such time as those standards applycompany for up to private companies. Therefore, we may not be subject to the same new or revised accounting standards as other public companies that are not “emerging growth companies.”five years. For asso long as we continue to beremain an emerging growth company, we alsoare permitted and intend to take advantage of certain otherrely on exemptions from various reportingcertain disclosure requirements that are applicable to other public companies including, butthat are not limitedapplicable to emerging growth companies. These exemptions include:

We have taken advantage of reduced reporting requirements in this report and exemption from any requirementmay continue to do so until such time that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis).we are no longer an emerging growth company. We will remain an emerging“emerging growth companycompany” until the earliest of (i)(a) the end of the fiscal year in which the market value of our common stock that is held by non-affiliates exceeds $700 million as of the end of the second fiscal quarter, (ii) the endlast day of the fiscal year in which we have total annual gross revenues of $1.235 billion or more, during such fiscal year, (iii)(b) December 31, 2026, the date on which we issue more than $1 billion in non-convertible debt in a three-year period, or (iv) the endlast day of the fiscal year following the fifth anniversary of the datecompletion of the first sale of our common stock pursuantIPO, (c) the date on which we have issued more than $1.0 billion in nonconvertible debt during the previous three years or (d) the date on which we are deemed to an effective registration statement filedbe a large accelerated filer under the Securities Act.rules of the SEC. Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period for complying with new or revised accounting standards.

We have incurred significant net losses since our inception and have financed our operations principally through equity and debt financing. We continue to incur significant research and development and other expenses related to the Merger, such as legalour ongoing operations. Our net loss was $13.0 million and accounting fees, which must be paid even if the Merger is not consummated;

We are a biopharmaceutical company with a limited operating history. Investment in product development inexpect to continue to incur significant losses for the healthcare industry, including of biopharmaceutical products, is highly speculative because it entails substantial upfront capital expendituresforeseeable future, and significant riskwe anticipate that any potentialour expenses will increase substantially if, and as, we:

To become and remain profitable, we or any potential future collaborator must develop and eventually commercialize products with significant market potential at an adequate profit margin after cost of goods sold and other expenses.potential. This will require us to be successful in a range of challenging activities, including completing preclinical studies and clinical trials, obtaining marketing approval for product candidates, manufacturing, marketing, and selling products for which we may

obtain marketing approval and satisfying any post-marketing requirements. We may never succeed in any or all of these activities and, even if we do, we may never generate revenue that is significant enough to achieve profitability. If we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis.

Developing biotechnology and our abilitybiopharmaceutical products, including conducting preclinical studies and clinical trials, is a very time-consuming, expensive, and uncertain process that takes years to generate revenue. Our prior losses and expected future losses have had and will continue to have an adverse effect on our stockholders’ equity and working capital.

As of December 31, 2023, we had approximately $1.8 million in cash and cash equivalents and an accumulated deficit of approximately $31.5 million. If we secure additional funds, we expect to devote substantial financial resources to our planned activities, particularly as we assessesconduct our clinical trials of GRI-0621 and GRI-0803, advance our discovery programs and continue our product development efforts. We are also party to a registration rights agreement that requires us to, among other things, obtain effectiveness of a registration statement and to maintain the best path forwardeffectiveness of the registration statements for ADAIR,resale of the shares underlying the Exchange Warrants (as defined below) and the Equity Warrants (as defined below). If we fail to comply with these obligations, we would be subject to substantial cash penalties and, as of the date of this Annual Report, would likely not have the resources to make such payments and continue our operations.

In addition, we expect to continue to spendincur additional costs associated with operating as a considerable amount of resourcespublic company. Based on pursuing strategic opportunities. Furthermore, to move forward with the development of ADAIR or any other product candidates,our current operating plan, we would be required to spend substantial amounts to conduct clinical trials of such programs, to validate the manufacturing process and specifications for any such product candidate, to seek regulatory approvals for such product candidate and to launch and commercialize any products for which we receives regulatory approval, including potentially building ours own commercial organization. As of December 31, 2022, we had approximately $3.8 million ofbelieve that our existing cash and cash equivalents will be sufficient to fund our operating expenses and capital expenditure requirements only into the second half of 2024. The Series T Warrants issued pursuant to that certain Securities Purchase Agreement, dated December 13, 2022, by and among the Company, GRI Operations and Altium Growth Fund L.P. (Altium), currently can be force exercised. We have based these estimates on hand.assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect. Our future capital requirements and the period for which our existing resources will support itsour operations may vary significantly from what we currently expect, and may change ifwe will require additional funding to recommence development of our business plan changes from our current expected operating plan.product candidates. Our monthly spending levels will vary based on new and ongoing development and corporate activities. Because the length of the uncertainty regardingtime and activities associated with development of our future development pathway,product candidates is highly uncertain, we are unable to estimate the actual funds we will require for development, of any potential product candidate and any approvedassuming approval, marketing and commercialization activities. Our future funding requirements, both

We will need to raise substantial funds in the near and long-term, will depend on many factors, including, but not limited to:

raise additional funds through public or private equity offerings, the terms of these securities may include liquidation or other preferences that adversely affect the rights of our stockholders’ rights.common stockholders. Further, to the extent that we raise additional capital through the sale of common stockCommon Stock or securities convertible into or exchangeable for common stock, each existing investors’into Common Stock, our stockholders’ ownership interest will be diluted. If we raise additional capital throughIn addition, any debt financing we would bemay subject us to fixed payment obligations and may be subject to covenants limiting or restricting itsour ability to take specific actions, such as incurring additional debt, making capital expenditures, or declaring dividends or acquiring or licensing intellectual property rights.dividends. If we raise additional capital through marketing and distribution arrangements or other collaborations, strategic alliances, or licensing arrangements with third parties, we may have to relinquish certain valuable intellectual property or other rights to itsour product candidate,candidates, technologies, future revenue streams or research programs or grant licenses on terms that may not be favorable to us. We also couldmay be required to seek collaborators for one or moreany of our current or future product candidates at an earlier stage than otherwise would be desirable or relinquish our rights to product candidates or technologies that we otherwise would seek to develop or commercialize itself.ourselves. Market volatility resulting from inflation, pandemics, geopolitical events or other financial markets factors could also adversely impact our ability to access capital as and when needed.  If we are unable to raisesecure adequate additional capitalfunding, we will need to reevaluate our operating plans and may be forced to make reductions in sufficient amounts or onspending, extend payment terms acceptable to us, we may have to significantlywith suppliers, liquidate assets where possible, delay, scale back or discontinue the developmenteliminate some or commercialization of one or moreall of our other research and development initiatives. Any of the above eventsprograms, relinquish rights to our technology on less favorable terms than we would otherwise choose or cease operations entirely. These actions could significantly harmmaterially impact our business, prospects, financial condition and results of operations, our future prospects and cause the pricevalue of shares of our common stock to decline.

We have incurred losses since inception and, to date, have not demonstrated an abilityfinanced our operations by issuing equity and debt securities. We anticipate that we will continue to incur losses and generate revenues fromnegative operating cash flows in the sales offoreseeable future as we continue to develop our proposed products.drug candidates and that we will require additional funding to support our planned operating activities. The report of our independent registered public accounting firm on our financial statements as of and for the year ended December 31, 2023 includes an explanatory paragraph indicating that there is substantial doubt about our ability to continue as a going concern. Until such time, if ever, in which we can generate substantial product revenue, we expect we may continue to fund our operations and capital funding needs through equity offerings, debt financings or other capital sources, including strategic licensing, collaboration or other similar agreements. As stated above, 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 it would otherwise choose. These actions could materially impact our business, results of operations, our future prospects and the value of shares of our Common Stock, and, as a result, our stockholders may receive no value for their investment.

We do not have complete control over many of these factors, including certain aspects of clinical development and the proceeds fromregulatory submission process, potential threats to our initial public offering (IPO) completedintellectual property rights and our manufacturing, marketing, distribution and sales efforts or that of any future collaborator. Delays in February 2021. If we are unableregulatory approvals or our failure to raise sufficient capital as and when needed,obtain regulatory approvals would harm our business, financial conditionprospects and results of operations willoperations.

To obtain the requisite regulatory approvals to commercialize any product candidates, we must demonstrate through extensive preclinical studies and adversely affected,clinical trials that our product candidates are safe and we will needeffective in humans for their intended use(s). Clinical testing is expensive and can take many years to significantly modify our operational plans to continue as a going concern. If we are unable to continue as a going concern, we may have to liquidate our assets,complete, and its outcome is inherently uncertain. In particular, the values we receivegeneral approach for our assets in liquidation or dissolution could be significantly lower than the values reflected in our financial statements. The inclusionFDA approval of a going concern explanatory paragraph bynew drug is dispositive data from two well-controlled, Phase 3 clinical trials of the relevant drug in the relevant patient population. Phase 3 clinical trials typically involve hundreds of patients, have significant costs and take years to complete.

A product candidate can fail at any stage of testing, even after observing promising signals of activity in earlier preclinical studies or clinical trials. The results of preclinical studies and early clinical trials of our independent registered public accounting firm, ourproduct candidates may not be predictive of the results of later-stage clinical trials. In addition, initial success in clinical trials may not be indicative of results obtained when such trials are completed. There is typically an extremely high rate of attrition from the failure of product candidates proceeding through clinical trials. Product candidates in later stages of clinical trials may fail to show the desired safety and efficacy profile despite having progressed through preclinical studies and initial clinical trials. A number of companies in biopharmaceutical industry have suffered significant setbacks in advanced clinical trials due to lack of cash resourcesefficacy or unacceptable safety issues, notwithstanding promising results in earlier trials. In general, most product candidates that commence clinical trials are never approved as products and our potential inability to continue as a going concern may materially adversely affect our share price and our ability to raise new capital, enter into critical contractual relations with third parties and otherwise execute our development strategy. Our ability to continue as a going concern is dependent on raising capital from the sale of our common stock and/or obtaining debt financing. Our cash and cash equivalents balance at December 31, 2022 was approximately $3.8 million. Based on our current expected level of operating expenditures, we expect to be able to fund our operations for more than four months from this filing after paying all current obligations. Our ability to remain a going concern is wholly dependent upon our ability to continue to obtain sufficient capital to fund our operations.

Product candidates that appear promising in the early phases of development may fail to reach our short-term developmental milestones within anticipated timelines duethe market for several reasons, including:

If we seek to conduct clinical trials in foreign countries or pursue marketing approvals in foreign jurisdictions, we must comply with numerous foreign regulatory requirements governing, among other things, the conduct of clinical trials, manufacturing and marketing authorization, pricing and third-party reimbursement. The foreign regulatory approval process varies among countries and may include all of the risks associated with FDA approval described above as well as risks attributable to the satisfaction of local regulations in foreign jurisdictions. Moreover, the time required to obtain approval may differ from that required to obtain FDA approval. Approval by the FDA does not ensure approval by regulatory authorities outside the United States and vice versa. Our competitors also may obtain FDA or regulatory approval from comparable foreign regulatory authorities for their product candidates more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we are able to enter the market or make our development more complicated.

Further, timely enrollment in clinical trials is reliant on clinical trial sites which may be adversely affected by global health matters, including, among other things, pandemics, supply and labor shortages and geopolitical events. These delays and potential delays to development timelines may adversely affect our business, prospects were highly dependentand results of operations.

From time to time, we publicly disclose interim, preliminary or topline data from our clinical studies, which is based on a single product candidate, ADAIR,preliminary analysis of then-available data, and while wethe results and related findings and conclusions are assessingsubject to change following a more comprehensive review of the best path forward for ADAIR,data related to the particular study or trial. We also make assumptions, estimations, calculations and conclusions as part of our analysis of data, and we may not have received or had the opportunity to fully and carefully evaluate all data. As a result, the interim, topline or preliminary results of clinical trials we report may differ from final results reported for those studies, or different conclusions or considerations may qualify such results, once additional data have been received and fully evaluated. Topline data also remain subject to audit and verification procedures that may result in the final data being materially different from the preliminary data we previously published. As a result, topline data should be viewed with caution until the final, complete data are available.

Interim data from clinical trials are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data become available. Adverse differences between preliminary or interim data and final data could significantly harm our business prospects. There can be no guarantee that a favorable interim analysis will result in a favorable final result at the completion of the clinical trial.

Changes in regulatory requirements, FDA guidance or unanticipated events during our preclinical studies and clinical studies may force us to amend preclinical studies and clinical study protocols. The FDA or comparable foreign regulatory authorities may also impose additional preclinical studies and clinical study requirements. Amendments or changes to our clinical study protocols, including changes to endpoints, would require resubmission to the FDA or comparable foreign regulatory authorities and IRBs for review and approval, which may increase the cost or delay the timing or successful completion of clinical studies. Similarly, amendments to our preclinical studies may increase the cost or delay the timing or successful completion of those preclinical studies. If we experience delays completing, or if we terminate, any of our preclinical or clinical studies, or if we are required to conduct additional preclinical or clinical studies, the commercial prospects for our product candidates may be harmed and our ability to recognize product revenue will be delayed.

Our long-term prospects were highly dependentinability to obtain sufficient product liability insurance at an acceptable cost to protect against potential product liability claims could prevent or inhibit the commercialization of products we develop. We may be unable to obtain, or may obtain on unfavorable terms, clinical trial insurance in amounts adequate to cover any liabilities from any of our clinical trials. Our insurance policies may also have various exclusions, and we may be subject to a product liability claim for which we have no coverage. We may have to pay any amounts awarded by a court or negotiated in a settlement that exceed our coverage limitations or that are not covered by our insurance, and we may not have, or be able to obtain, sufficient capital to pay such amounts. Even if our agreements with any future acceptance and revenues fromcorporate collaborators entitle us to indemnification against losses, such indemnification may not be available or adequate should any claim arise.

The Drug Price Competition and Patent Term Restoration Act of 1984, informally known as the Hatch-Waxman Act, added Section 505(b)(2) to the FDCA. Section 505(b)(2) permits the filing of an NDA where at least some of the information required for approval comes from studies and information that were not conducted by or for the applicant and for which the applicant has not obtained a right of reference. Section 505(b)(2), if applicable to us under the FDCA. This would allow an NDA we submit to the FDA to rely in part on data in the public domain or the FDA’s prior conclusions regarding the safety and effectiveness of approved compounds, which could expedite the development programs for GRI-0621. In March 2022,addition, although 505(b)(2) applicants have significant flexibility in the types of studies, data, and information they may submit in a 505(b)(2) NDA to support the requirements for NDA approval, establish a favorable benefit-risk profile for the new drug product, and demonstrate the new drug’s substantial evidence of effectiveness for its proposed intended use(s), the applicant bears the burden of establishing a scientific bridge between its drug product and each listed drug that the applicant seeks to rely upon and that the studies it is proposing to conduct are scientifically justified. If the FDA disagrees with the applicant’s proposed development plan for the follow-on drug product, it may require companies to perform additional studies or measurements, including nonclinical and clinical studies, to support the change from the approved product. FDA also may request or require studies to incorporate additional clinical endpoints than what the sponsor proposes. The extent of data necessary to establish the safety and/or effectiveness of the new product, such as the effects of changing the drug’s route of administration from topical to oral, are therefore scientifically driven and determined on a case-by-case basis. There can be no assurance that the studies and clinical trials we announced that topline data from our SEAL studypropose to FDA to establish the safety and effectiveness of ADAIRGRI-0621 for the treatment of ADHD failedIPF, or any future candidates we may develop using the 505(b)(2) NDA pathway, will be deemed sufficient to meet statistical significancesupport all of the differences between our product candidate and the relevant listed drug. For example, we may be required to collect more safety data than we anticipate in order to gain approval of an oral formulation of an active ingredient that has previously been approved by FDA only for topical administration.

If the primary endpointFDA’s interpretation of Emax Drug LikingSection 505(b)(2) is successfully challenged, or if Congress were to amend the statute to alter the currently available regulatory pathway, the FDA may change its 505(b)(2) policies and that, given that result,practices, which could delay or even prevent the FDA from approving any NDA we submit under Section 505(b)(2). In addition, the pharmaceutical industry is highly competitive, and Section 505(b)(2) NDAs are subject to special requirements designed to protect the patent rights of sponsors of previously approved drugs referenced in a Section 505(b)(2) NDA. Even if we are currently assessingable to utilize the best path forwardSection 505(b)(2) regulatory pathway for ADAIR. Any further developmentone or more of ADAIR would require substantial capital and time to complete, andour candidates, there is no guarantee thatthis would ultimately lead to faster product development or earlier approval.

Moreover, any future clinical trial, if pursued, would be timely or successful, or that ADAIR would be approved or, if approved, that commercialization would be successful. Concurrently, we have been evaluating strategic alternativesdelay resulting from our inability to maximize stockholder value, whichpursue the FDA’s 505(b)(2) pathway could involve, without limitation, exploringresult in new competitive products reaching the potential for a possible merger, business combination, investment into the Company, or a purchase, license or other acquisition of assets. However, there is no assurance that we will be successful inmarket more quickly than our pursuit of a strategic alternative, failure ofGRI-0621 product candidate, which may have a material adverse impact on our business, financial condition,competitive position and resultsprospects. Even if we are allowed to pursue the FDA’s 505(b)(2) pathway, we cannot assure you that GRI-0621 or any of operations.our future product candidates will receive the requisite approvals for commercialization.

If a product candidate is intended for the rightstreatment of a serious condition and nonclinical or clinical data demonstrate the potential to develop and commercialize ADAIRaddress an unmet medical need for this condition, a product sponsor may apply for FDA Fast Track designation. If we seek Fast Track designation for a product candidate, we may not receive it from the FDA. However, even if we receive Fast Track designation, Fast Track designation does not ensure that we will receive marketing approval or ADMIR inthat approval will be granted within any particular time frame. We may not experience a faster development or regulatory review or approval process with Fast Track designation compared to conventional FDA procedures. In addition, the United States or other markets but be unsuccessful.FDA may withdraw Fast Track designation if the designation is no longer supported by data from our clinical development program. Fast Track designation alone does not guarantee qualification for the FDA’s priority review procedures.

Any regulatory approvals that we receive for our product candidates may be subject to limitations on the approved indicated uses for which the product may be marketed or maintaining international business relationships, including:to the conditions of approval, or contain requirements for potentially costly post-marketing testing, including Phase 4 clinical trials and surveillance to monitor the safety and efficacy of the product candidate. The FDA may also require a REMS program as a condition of approval of our product candidates, which could entail requirements for long-term patient follow-up, a medication guide, physician communication plans or additional elements to ensure safe use, such as restricted distribution methods, patient registries and other risk minimization tools. In addition, if the FDA or a comparable foreign regulatory authority approves our product candidates, we will have to comply with requirements including submissions of safety and other post-marketing information and reports and registration. If our original marketing approval for a product candidate was obtained through an accelerated approval pathway, we could be required to conduct a successful post-marketing clinical trial in order to confirm the clinical benefit for our products. An unsuccessful post-marketing clinical trial or failure to complete such a trial could result in the withdrawal of marketing approval.

Any government investigation of alleged violations of law couldwould be expected to require us to expend significant time and resources in response and could generate negativeadverse publicity. Any failure to comply with ongoing regulatory requirements may significantly and adversely affect our ability to develop and commercialize our products and generate revenuesour value and our operating results would be adversely affected. In addition, the policies of the FDA and of other regulatory authorities may change and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our product candidates. We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action, either in the United States or abroad. If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we may have obtained and we may not achieve or sustain profitability.

Even if GRI-0621, GRI-0803 or any other future product candidate we develop receives marketing approval, it may nonetheless fail to gain sufficient market acceptance by physicians, patients and third-party payors, such as ADAIRMedicare and Medicaid programs and managed care organizations, and others in the medical community. In addition, the availability of coverage by third-party payors may be affected by existing and future health care reform measures designed to reduce the cost of health care. If the product candidates we develop do not achieve an adequate level of acceptance, we may not generate significant product revenues and we may not become profitable.

If regulatory sanctions are applied or if regulatory approval is withdrawn, the valueSales of our company and our operating results will be adversely affected.

In order to market any products outside of the United States, we must establish and comply with numerous and varying regulatory requirements of other countries regarding safety and efficacy. Clinical trials conducted in one country may not be accepted by regulatory authorities in other countries, and regulatory approval in one country does not mean that regulatory approval will be obtained in any other country. Approval procedures vary among countries and can involve additional product testing and validation and additional administrative review periods. Seeking foreign regulatory approvals could result in significant delays, difficulties, and costs for us and may require a significant amount of management’sadditional preclinical studies or clinical trials which would be costly and time consuming. Regulatory requirements can vary widely from country to country and attention, atcould delay or prevent the expense of other aspectsintroduction of our business. The outcome of litigationproducts in those countries. Satisfying these and other regulatory requirements is alwayscostly, time consuming, uncertain and subject to unanticipated delays. In addition, our failure to obtain regulatory approval in some cases, could include judgments against us which couldany country may delay or have a materially adverse effectnegative effects on our business.

and development programs and proposed products for specific indications may not yield any commercially viable products. If we do not accurately evaluate the commercial potential or target market for a particular proposed product, we may relinquish valuable rights to that proposed product through collaboration, licensing, or other royalty arrangementsapproval in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to such proposed product.

We have to makeno internal sales, marketing, or distribution capabilities. We have no prior experience as a company in the marketing, sale and distribution of pharmaceutical products and there are significant additional expenditures to address these issues. To effectively manage our growth, we will need to continue to improve our operational, financial,risks involved in building and management controls and our reporting systems and procedures. This will require that we refine our information technology systems to maintain effective online services and enhance information and communication systems to ensure that our employees effectively communicate with each other and our growing base of customers. These system enhancements and improvements will require significant incremental and ongoing capital expenditures and allocation of valuable management and employee resources. If we fail to implement these improvements and maintenance programs effectively,managing a sales organization, including our ability to hire, retain and incentivize qualified individuals, generate sufficient sales leads, provide adequate training to sales and marketing personnel and effectively manage a geographically dispersed sales and marketing team. Any failure or delay in the development of our expected growthsales, marketing and complydistribution capabilities would adversely impact the commercialization of any product candidates that may obtain approval. We may also choose to collaborate with the rulesthird parties that have direct sales forces and regulations that are applicableestablished distribution systems, either to publicly reporting companies will be impairedaugment our own sales force and we may incur additional expenses.

Healthcare providers, physicians and third-party payors in the future dueUnited States and elsewhere play a primary role in the recommendation and prescription of pharmaceutical products. Arrangements with third-party payors and customers can expose pharmaceutical manufacturers to the intense competition for qualified personnel among biotechnology, pharmaceutical,broadly applicable fraud and abuse and other businesses.healthcare laws and regulations, including, without limitation, the AKS and the federal False Claims Act, which may constrain the business or financial arrangements and relationships through which such companies sell, market and distribute pharmaceutical products. In addition,particular, the loss of one or moreresearch of our senior executive officers or key consultants could be detrimental to us if we cannot recruit suitable replacements in a timely manner.

The scope and enforcement of each of these laws is intense.uncertain and subject to rapid change in the current environment of healthcare reform. Ensuring business arrangements comply with applicable healthcare laws, as well as responding to possible investigations by government authorities, can be time- and resource-consuming and can divert a company’s attention from other aspects of its business.

It is possible that governmental and enforcement authorities will conclude that our business practices may not comply with current or future statutes, regulations or case law interpreting applicable fraud and abuse or other healthcare laws and regulations. If any such actions are instituted against us, and we are not able to attract and retain necessary personnel to accomplishsuccessful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, objectives, we may experience constraints that will significantly impedeincluding the achievementimposition of significant civil, criminal and administrative penalties, damages, fines, disgorgement, imprisonment, reputational harm, possible exclusion from participation in federal and state funded healthcare programs, contractual damages and the curtailment or restricting of our development objectives, our ability to raise additional capital and our ability to implement our business strategy.

Changes in regulations, statutes or the interpretation of existing regulations could impact our business in the future by requiring, for example, changes to our manufacturing arrangements; additions or modifications to product labeling; the recall or discontinuation of our products; or additional record-keeping requirements. If any such changes were to be imposed, they could adversely affect the operation of our business. If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we may have obtained, and we may not achieve or sustain profitability. See the section entitled, “Item 1. Business - Government Regulation and Product Approval - Pharmaceutical Coverage, Pricing and Reimbursement & Healthcare Reform.”

At the state level, legislatures are increasingly passing legislation and implementing regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing. Legally mandated price controls on payment amounts by third-party payors or other restrictions could harm our business, financial condition, results of operations and prospects. In addition, regional healthcare authorities and individual hospitals are increasingly using bidding procedures to determine what pharmaceutical products and which suppliers will be included in their prescription drug and other healthcare programs. This could reduce the ultimate demand for our consultantsproducts or put pressure on our product pricing, which could negatively affect our business, financial condition, results of operations and advisorsprospects. In addition, the U.S. Supreme Court held unanimously in December 2020 that federal law does not preempt the states’ ability to regulate PBMs and other members of the health care and pharmaceutical supply chain, an important decision that has led to further and more aggressive efforts by states in this area.

The FTC in mid-2022 also launched sweeping investigations into the practices of the PBM industry that could lead to additional federal and state legislative or regulatory proposals targeting such entities’ operations, pharmacy networks, or financial arrangements. Both the U.S. Congress and state legislatures are increasingly scrutinizing the industry and proposing novel regulatory approaches to address various perceived public policy concerns.Significant efforts to change the PBM industry as it currently exists in the United States may haveaffect the entire pharmaceutical supply chain and the business of other clientsstakeholders, including biopharmaceutical product developers like us. Further, in September 2023, the FTC issued a policy statement articulating its view that certain “improper” patent listings by drug developers in FDA’s Orange Book represent an unfair trade practice and indicated that industry should be prepared for potential enforcement actions based on its analysis. The FTC followed that action in November 2023 by publicly calling out over 100 “improper” patent listings made by ten large pharmaceutical companies and initiating an FDA administrative process with respect to those patents. It remains to be seen whether the FTC, other governmental agencies, pharmaceutical manufacturers, or projects that growother stakeholders continue to prioritize the

policy issue of “improper” patent listings and whether significant litigation will develop in scopethis area. Accordingly, regulatory and government interest in biopharmaceutical industry business practices continues to expand and pose a risk of uncertainty.

These laws, and future state and federal healthcare reform measures may be adopted in the future, any of which may result in additional reductions in Medicare and other healthcare funding and otherwise affect the prices we may obtain for any of our product candidates for which we may obtain regulatory approval or they may acquirethe frequency with which any such product candidate is prescribed or used. Additionally, we expect to experience pricing pressures in connection with the sale of any future approved product candidates due to the trend toward managed healthcare, the increasing influence of health maintenance organizations, cost containment initiatives and additional legislative changes.

Among other matters, United States. and foreign anti-corruption, anti-money laundering, export control, sanctions, and other trade laws and regulations (collectively, Trade Laws) prohibit companies and their employees, agents, clinical research organizations, legal counsel, accountants, consultants, contractors, and other partners from authorizing, promising, offering, providing, soliciting, or receiving directly or indirectly, corrupt or improper payments or anything else of value to or from recipients in the public or private sector. Violations of Trade Laws can result in substantial criminal fines and civil penalties, imprisonment, the loss of trade privileges, debarment, tax reassessments, breach of contract and fraud litigation, reputational harm, and other consequences. We have direct or indirect interactions with officials and employees of government agencies or government-affiliated hospitals, universities and other organizations. We also expect our non-U.S. activities to increase in time. We plan demandsto engage third parties for clinical trials and/or to obtain necessary permits, licenses, patent registrations and other regulatory approvals and we can be held liable for the corrupt or other illegal activities of our personnel, agents, or partners, even if we do not explicitly authorize or have prior knowledge of such activities.

eliminate the risk of accidental contamination or injury from these materials. In such an event, we may be held liable for any resulting damages and such liability could exceed our resources and state or federal or other applicable authorities may curtail our use of specified materials and/or interrupt our business operations. Furthermore, environmental laws and regulations are complex, change frequently, and have tended to become more stringent. We cannot predict the impact of such changes and cannot be certain of our future compliance. We do not currently carry hazardous waste insurance coverage.

The strength of patents in the biotechnology and biopharmaceutical field involves complex legal and scientific questions and can be uncertain. The patent applications that we own or in-license may fail to result in issued patents with claims that cover our product candidates or uses thereof in the United States or in other foreign countries. Even if the patents do successfully issue, third parties may challenge the validity, enforceability, or scope thereof, which may result in such patents being narrowed, invalidated, or held unenforceable. Furthermore, even if they are unchallenged, our patents and patent applications may not adequately protect our technology, including our product candidates, or prevent others from designing around our claims. If the breadth or strength of protection provided by the patent applications we hold with respect to our product candidates is threatened, it could dissuade companies from collaborating with us to develop, and threaten our ability to commercialize, our product candidates. Further, if we encounter delays in our clinical trials, the period of time thanduring which we could market our product candidates under patent protection would be reduced.

We cannot be certain that we were the first to invent the inventions covered by pending patent applications and, if we are not, we may be subject to priority disputes. Furthermore, for U.S. applications in which all claims are entitled to a priority date before March 16, 2013, an interference proceeding can be provoked by a third-party or instituted by the USPTO to determine who was the first to invent any of the subject matter covered by the patent claims of our applications. Similarly, for U.S. applications in which at least one claim is not entitled to a priority date before March 16, 2013, derivation proceedings can be instituted to determine whether the subject matter of a patent claim was derived from a prior inventor’s disclosure.

In addition, the agreements under which we currently committedlicense intellectual property or technology from third parties are complex, and certain provisions in such agreements may be susceptible to multiple interpretations. The resolution of any contract interpretation disagreement that may arise could narrow what we believe to be the scope of our rights to the relevant intellectual property or technology or increase what we believe to be our financial or other obligations under the relevant agreement, either of which could have a material adverse effect on our business, financial condition, results of operations, and prospects. Moreover, if disputes over intellectual property that we have licensed prevent or impair our ability to maintain our current licensing arrangements on commercially acceptable terms, we may be unable to successfully develop and commercialize the affected product candidates, which could have a material adverse effect on our business, financial conditions, results of operations, and prospects.

In addition, we may have limited control over the maintenance and prosecution of these in-licensed patents and patent applications, or any other intellectual property that may be related to our in-licensed intellectual property. For example, we cannot be certain that such activities by any future licensors have been or will be conducted in compliance with applicable laws and regulations or will result in valid and enforceable patents and other intellectual property rights. We have limited control over the manner in which our licensors initiate an infringement proceeding against a third-party infringer of the intellectual property rights or defend certain of the intellectual property that is licensed to us. It is possible that the licensors’ infringement proceeding, or defense activities may be less vigorous than had we conducted them ourselves.

In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments, and, if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our officers, directors,Common Stock. This type of litigation or proceeding could substantially increase our operating losses and reduce our resources available for development activities. We may not have sufficient financial or other resources to adequately conduct such litigation or proceedings. Some of our competitors may be able to sustain the costs of complex patent litigation more effectively than we can because they have substantially greater resources. In addition, any uncertainties resulting from the initiation and continuation of any litigation could have a material adverse effect on our ability to raise the funds necessary to continue our operations or could otherwise have a material adverse effect on our business, results of operations, financial condition, and prospects. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation or administrative proceedings, there is a risk that some of our confidential information could be compromised by disclosure.

As is common in the biotechnology and biopharmaceutical industries, we employ individuals who were previously employed at universities or other biotechnology or biopharmaceutical companies, including our competitors or potential competitors. Although no claims against us are currently pending, and although we try to ensure that our employees and consultants do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that we or our employees, consultants or advisors, they willindependent contractors have inadvertently or otherwise used or disclosed intellectual property, including trade secrets or other proprietary information, of a former employer or other third parties. Litigation may be under no obligationnecessary to commitdefend against these claims. If we fail in defending any such additional time,claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel. Even if we are successful in defending against such claims, litigation or other legal proceedings relating to intellectual property claims may cause us to incur significant expenses and could distract our technical and management personnel from their failurenormal responsibilities. In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments, and, if securities analysts or investors perceive these

results to do sobe negative, it could have a substantial adverse effect on the price of our Common Stock. This type of litigation or proceeding could substantially increase our operating losses and reduce our resources available for development activities. We may not have sufficient financial or other resources to adequately conduct such litigation or proceedings. Some of our competitors may be able to sustain the costs of such litigation or proceedings more effectively than we can because of their substantially greater financial resources. Uncertainties resulting from the initiation and continuation of patent litigation or other intellectual property related proceedings could adversely affect our ability to carrycompete in the marketplace.

If we or one of our licensors initiate legal proceedings against a third-party to enforce a patent covering one of our product candidates, the defendant could counterclaim that the patent covering our product candidate, as applicable, is invalid and/or unenforceable. In patent litigation in the United States, defendant counterclaims alleging invalidity and/or unenforceability are commonplace, and there are numerous grounds upon which a third-party can assert invalidity or unenforceability of a patent. Third parties may also raise similar claims before administrative bodies in the United States or abroad, even outside the context of litigation. Such mechanisms include re-examination, inter partes review, post grant review, and equivalent proceedings in foreign jurisdictions (e.g., opposition proceedings). Such proceedings could result in revocation or amendment to our patents in such a way that they no longer cover our product candidates. The outcome following legal assertions of invalidity and unenforceability is unpredictable. With respect to the validity question, for example, we cannot be certain that there is no invalidating prior art, of which we, our patent counsel and the patent examiner were unaware during prosecution. If a defendant were to prevail on a legal assertion of invalidity and/or unenforceability, or if we are otherwise unable to adequately protect our rights, we would lose at least part, and perhaps all, of the patent protection on our product candidates. Such a loss of patent protection could have a material adverse impact on our business and successfully executeour ability to commercialize or license our technology and product candidates.

Our earliest patents may expire before, or soon after, our first product achieves marketing approval in the United States or foreign jurisdictions. Upon the expiration of our current patents, we may lose the right to exclude others from practicing these inventions. The expiration of these patents could also have a similar material adverse effect on our business, plan.results of operations, financial condition and prospects. We own pending patent applications covering our proprietary technologies or our product candidates that if issued as patents are expected to expire from 2032 through 2035, without taking into account any possible patent term adjustments or extensions. However, we cannot be assured that the USPTO, EPO or other relevant foreign patent offices will grant any of these patent applications.

We have relied upon and plan to continue to rely upon third-party CROs to conduct, monitor and manage our clinical programs. We rely on these parties for execution of clinical trials and we manage and control only some aspects of their activities. We remain responsible for ensuring that each of our trials is conducted in accordance with the applicable protocol, legal, regulatory and scientific standards, and our reliance on the CROs does not relieve us of our regulatory responsibilities. We and our CROs and other vendors are required to comply with all applicable laws, regulations and guidelines, including those required by the FDA and comparable foreign regulatory authorities for all of our officersproduct candidates in clinical development. If we, or any of our CROs or vendors, fail to comply with applicable laws, regulations or guidelines, the results generated in our clinical trials may be deemed unreliable, and directors,the FDA or comparable foreign regulatory authorities may require us to perform additional clinical trials before approving our marketing applications. We cannot be assured that our CROs or other vendors will meet these requirements, or that upon inspection by any regulatory authority, such regulatory authority will determine that efforts, including any of our clinical trials, comply with applicable requirements. Our failure to comply with these laws, regulations or guidelines may require us to repeat clinical trials, which would be costly and delay the regulatory approval process.

If any of our relationships with these third-party CROs terminates, or they otherwise are subject to quarantines, shelter-in-place orders, shutdowns or other restrictions and must scale back their operations unexpectedly we may not be able to enter into arrangements with alternative CROs in a timely manner or do so on commercially reasonable terms. In addition, our CROs may not prioritize our clinical trials relative to those of other customers, and any turnover in personnel or delays in the courseallocation of CRO employees by the CRO may negatively affect our clinical trials. If CROs do not successfully carry out their other business activities, may become aware of investments, business opportunities,contractual duties or information whichobligations or meet expected deadlines, our clinical trials may be appropriatedelayed or terminated, and we may not be able to meet our current plans with respect to our product candidates. CROs also may involve higher costs than anticipated, which could negatively affect our financial condition and operations.

In addition, we rely on third-party manufacturers to produce our clinical-stage product candidates, and their responsibilities often include purchasing from third-party suppliers the materials necessary to produce our product candidates for presentationour clinical trials and regulatory approval. We expect there to us as well asbe a limited number of suppliers for some of the raw materials that we expect to other entitiesuse to which they owemanufacture our product candidates, and we may not be able to identify alternative suppliers to prevent a fiduciary duty. They may alsopossible disruption of the manufacture of our product candidates for our clinical trials, and, if approved, ultimately for commercial sale.

Although we generally do not expect to begin a clinical trial unless we believe we have a sufficient supply of a product candidate to complete the trial, any significant delay or discontinuity in the future become affiliated with entities that are engaged in businesssupply of a product candidate, or the raw materials or other activities similarmaterial components in the manufacture of the product candidate, could delay completion of our clinical trials and potential timing for regulatory approval of our product candidates, which would harm our business and results of operations. We do not yet have sufficient information to those we intendreliably estimate the cost of the commercial manufacturing of our product candidates and our current costs to conduct.manufacture our product candidates may not be commercially feasible. As a result, theywe may have conflictsnever be able to develop a commercially viable product.

We are exposed to the risk of employee fraudthat our employees, independent contractors, principal investigators, CROs, consultants or vendors may engage in fraudulent or other misconduct.illegal activity. Misconduct by employeesthese parties could include intentional, failuresreckless and/or negligent conduct or disclosure of unauthorized activities to comply withus that violates: FDA regulations, provideincluding those laws requiring the reporting of true, complete and accurate information to the FDA, comply withFDA; manufacturing standards we have established, comply withstandards; federal and state health-carehealthcare fraud and abuse laws and regulations, reportregulations; or laws that require the true, complete and accurate reporting of financial information or data accurately or disclose unauthorized activities to us under the Federal Physician Payments Sunshine Act and similar state laws. In particular, sales, marketing, and business arrangements in the healthcare industry are subject to extensive laws and regulations intended to prevent fraud, kickbacks, self-dealing, making or contributing to the making of a false claim for reimbursement to federal, state or private payors, and other abusive practices.data. These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs and other business arrangements. Employee misconduct couldActivities subject to these laws also involve the improper use or misrepresentation of information obtained in the course of clinical trials or creating fraudulent data in our preclinical studies or clinical trials, which could result in regulatory sanctions and serious harm to our reputation. The

It is not always possible to identify and deter misconduct by our employees and other third parties, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to complybe in compliance with such laws or regulations. Additionally, we are subject to the risk that a person could allege such fraud or other misconduct, even if none occurred. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, and results of operations, including the imposition of significantcivil, criminal and administrative penalties, damages, monetary fines, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, contractual damages, reputational harm, diminished potential profits and future earnings, and curtailment of our operations, any of which could adversely affect our business, financial condition, results of operations or prospects.

We rely on third-party contract manufacturers to manufacture our product candidates for preclinical studies and clinical trials. We do not own manufacturing facilities for producing any clinical trial product supplies. There can be no assurance that our preclinical and clinical development product supplies will not be limited or interrupted, or that they will be of satisfactory quality or continue to be available at acceptable prices. The manufacturing process for a product candidate is subject to FDA and foreign regulatory authority review. Suppliers and manufacturers must meet applicable manufacturing requirements and undergo rigorous facility and process validation tests required by regulatory authorities in order to comply with regulatory standards, such as cGMPs. In the event that any of our manufacturers fails to comply with these requirements or to perform its obligations to us in relation to quality, timing or otherwise, or if our supply of components or other sanctions.

A part of our strategy is becoming increasinglyto consider partnerships in indications and geographies where we believe partners can add significant commercial and/or development capabilities. Further, we do not yet have any capability for commercialization. Accordingly, we have and may in the future enter into collaborations with other companies to provide us with important technologies and funding for our programs and technology. Any future collaborations we enter into may pose a number of risks, including that collaborators have significant discretion in determining the efforts and resources that they will apply and may not perform their obligations as expected, collaborators may not provide us with timely and accurate information regarding development progress and activity under any future license agreement, which could adversely impact our ability to report progress to our investors and otherwise plan development of our product candidates, we may have disagreements with collaborators, including disagreements over proprietary rights, contract interpretation or the preferred course of development, might cause delays or terminations of the research, development or commercialization of product candidates, might lead to additional responsibilities for us with respect to product candidates, or might result in litigation or arbitration, any of which would be time-consuming and expensive and collaborations may be terminated by the collaborator, and, if terminated, we could be required to raise additional capital to pursue further development or commercialization of the applicable product candidates.

We face significant competition in seeking appropriate collaborators for our product candidates, and the negotiation process is time-consuming and complex. In order for us to successfully establish a collaboration for one or more of our product candidates, potential collaborators must view these product candidates as economically valuable in markets they determine to be attractive in light of the terms that we are seeking and other available products for licensing by other companies. Collaborations are complex and time-consuming to negotiate and document. If we are unable to reach agreements with suitable collaborators on a timely basis, on acceptable terms, or at all, we may have to curtail the development of a product candidate, reduce or delay its development program or one or more of our other development programs, delay its potential commercialization or reduce the scope of any sales or marketing activities, or increase our expenditures and undertake development or commercialization activities at our own expense. If we elect to increase our expenditures to fund development or commercialization activities on our own, we may need to obtain additional expertise and additional capital, which may not be available to us on acceptable terms, or at all. If we fail to enter into future collaborations or do not have sufficient funds or expertise to undertake the necessary development and commercialization activities, we may not be able to further develop our product candidates, bring them to market and generate revenue from sales of drugs or continue to develop our technology, and our business may be materially and adversely affected. Even if we are successful in our efforts to establish new strategic collaborations, the terms that we agree upon may not be favorable to us, and we may not be able to maintain insurance coverage atsuch strategic collaborations if, for example, development or approval of a reasonable costproduct candidate is delayed or sales of an approved product are disappointing. Any delay in sufficient amountsentering into new strategic collaboration agreements related to protect us against losses dueour product candidates could delay the development and commercialization of our product candidates and reduce their competitiveness even if they reach the market.

We conduct our operations at our facility in La Jolla, California. This region is headquarters to many other biotechnology companies, biopharmaceutical companies, and research institutions. Competition for skilled personnel in our market is intense and may limit our ability to hire and retain highly qualified personnel on acceptable terms or at all.

To induce valuable employees to remain at our company, in addition to salary and cash incentives, we have provided equity awards that vest over time. The value to employees of equity awards that vest over time may be significantly affected by movements in our stock price that are beyond our control and may at any future product intime be insufficient to counteract more lucrative offers from other companies. Despite our efforts to retain valuable employees, members of our management, scientific and development such as ADAIRteams may terminate their employment with us on short notice. Our key employees are at-will employees, which means that any of our employees could leave our employment at any time, with or ADMIR, butwithout notice. There is no guarantee that any “key person” insurance policy we have or may enter into would adequately compensate us for the loss of any key employee. Our success also depends on our ability to continue to attract, retain and motivate highly skilled junior, mid-level and senior scientific and medical personnel.

The biotech industry has experienced a high rate of turnover in recent years. Our ability to compete in the highly competitive biopharmaceuticals industry depends upon our ability to attract, retain, and motivate highly skilled and experienced personnel with scientific, medical, regulatory, manufacturing, and management skills and experience. We may not be able to attract or retain qualified personnel in the future due, in part, to the intense competition for any product approveda limited number of qualified personnel among biopharmaceutical companies. Many of the other biopharmaceutical companies against which we will compete have greater financial and other resources, different risk profiles, and a longer history in the industry. Our competitors may provide higher compensation, more diverse opportunities, and/or better opportunities for marketing. On occasion, large judgments have been awarded in class action lawsuits based on drugs that had unanticipated side effects. A successful product liability claimcareer advancement. Any or seriesall of claims brought against usthese competing factors may limit our ability to continue to attract and retain high quality personnel, which could cause our stock price to fall and, if judgments exceed our insurance coverage, could decrease our cash and adverselynegatively affect our business.ability to successfully develop and commercialize our product candidates and to grow our business and operations as currently contemplated.

Our internal computer systems, or those used by third-party CROs, manufacturers, or other contractors or consultants, may fail or suffer security breaches.

Increased scrutinyWe rely on information technology systems that we or our third-party providers operate to process, transmit and store electronic information in our day-to-day operations. In connection with our product discovery efforts, we may collect and use a variety of our environmental, social or governance responsibilities havepersonal data, such as names, mailing addresses, email addresses, phone numbers and will likely continue toclinical trial information. A successful cyberattack could result in additional coststhe theft or destruction of intellectual property, data, or other misappropriation of assets, or otherwise compromise our confidential or proprietary information and risksdisrupt our operations. Cyberattacks are increasing in their frequency, sophistication and may adversely impact our reputation, employee retentionintensity, and willingness of customers and suppliers to do business with us.

conduct by hostile foreign governments, industrial espionage, wire fraud and long-term liquidity. In addition,other forms of cyber fraud, the lossdeployment of anyharmful malware, denial of our employees as a result of COVID-19, or another pandemic, may adversely affect our operations. The ultimate impact of the COVID-19 pandemic is highly uncertain, and we do not yet know the full extent of potential delays or impacts that COVID-19 may have on our business, financing, or clinical trial activities.

We will require substantial additional funding, which may not be availablerely on our third-party providers to us on acceptable terms,implement effective security measures and identify and correct for any such failures, deficiencies or at all,breaches. If we or our third-party providers fail to maintain or protect our information technology systems and if not so available, may require usdata integrity effectively or fail to delay, limit, reduceanticipate, plan for or ceasemanage significant disruptions to our operations.

Our business could be adversely affected by the effects of health pandemics or epidemics in regions where it has concentrations of clinical trial sites or other business operations, and could cause significant disruption in the operations of third-party manufacturers and CROs upon whom it relies. Such pandemics or epidemics may negatively impact productivity, disrupt business and delay clinical programs and timelines, the magnitude of which will depend, in part, on the length and severity of any restrictions and other limitations placed on our ability to conduct business in the ordinary course as a result of any such pandemic or epidemic. These and similar disruptions in operations could negatively impact our business, operating results and financial condition.

It is possible that we may be subject to securities litigation in the future, including potential class action or stockholder derivative actions. Our indemnification agreements with our directors and certain officers, as well as Delaware General Corporation Law (DGCL), may require us, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. Without D&O insurance, the amounts we would pay to defend any such litigation or indemnify our officers and directors should they be subject to legal action based on their service to us could have a material adverse effect on our financial condition, results of operations and liquidity.

Moreover, the stock markets in general have experienced substantial volatility in the biotech industry that has often been unrelated to the operating performance of individual companies or a lackcertain industry segment. These broad market fluctuations may also adversely affect the trading price of fundsour Common Stock.

We expect that significant additional capital will be needed in the future to continue our planned operations, including research and development, increased marketing, hiring new personnel, commercializing our companyproducts, and continuing activities as an operating public company. To the extent we raise additional capital by issuing equity securities, our stockholders may experience substantial dilution. We may sell shares of our Common Stock, convertible securities or other equity securities in one or more transactions at prices and in a manner we determine from time to dissolvetime. If we sell Common Stock, convertible securities or other equity securities in more than one transaction, investors may be materially diluted by subsequent sales. Such sales may also result in material dilution to our existing stockholders, and liquidatenew investors could gain rights superior to our existing stockholders.

As of December 31, 2023, there were a total of (i) 530,375 shares of Common Stock directly or indirectly underlying the Equity Warrants (including (i) 116,353 shares of Common Stock underlying Series A-1 Warrants to purchase shares of Common Stock, which Series A-1 Warrants are issuable upon exercise of Series T Warrants, assuming that the Series T Warrants have been exercised in full by paying the aggregate exercise price in cash and (ii) 116,353 shares of Common Stock underlying Series A-2 Warrants to purchase shares of Common Stock, which Series A-2 Warrants are issuable upon exercise of Series T Warrants, assuming that the Series T Warrants have been exercised in full by paying the aggregate exercise price in cash), (iii) 4,576 shares of Common Stock underlying other outstanding warrants to purchase Common Stock, (iv) 4,318 shares of Common Stock issuable upon the exercise of vested outstanding options under the Amended and Restated GRI Bio, Inc. 2018 Equity Incentive Plan, formerly the Vallon Pharmaceuticals, Inc. 2018 Equity Incentive Plan (the A&R 2018 Plan), and (v) an additional 28,324 shares of Common Stock issuable upon the exercise of options that remain subject to vesting as of that date and no options available for future issuance under the GRI Bio, Inc. 2015 Equity Incentive Plan (the GRI Operations Plan) or the A&R 2018 Plan. In connection with littlethe issuance of the securities pursuant to the Purchase Agreement the exercise price of the Series A-1 Warrants was reduced to par, or $0.0001, per share pursuant to the terms of the Series A-1 Warrants.

As of December 31, 2023, an aggregate of 60,227 shares of our Common Stock have been issued upon the exercise of Exchange Warrants and an aggregate of 163,185 shares of our Common Stock have been issued upon the exercise of Series A-2 Warrants, in each case, on a cashless basis for which the Company received no returnproceeds. We will not receive any proceeds from the exercise of warrants to investors.the extent exercised on a cashless basis. The holders of these securities or their affiliates have and may sell large amounts of our Common Stock in the open market or in privately negotiated transactions, which, in the past and again may result in a lower trading price of our Common Stock and substantial dilution to our stockholders. Additionally, the registration and availability of such a significant number of shares of Common Stock for trading in the public market has and may increase the volatility in our stock price or put significant downward pressure on the price of our stock.

As a public company, we incur significant legal, accounting and other expenses under the Exchange Act,Ac), the Sarbanes-Oxley Act of 2022, as amended (SOX) and other applicable securities rules and regulations. In addition, we are subject to the requirementsrules of The Nasdaq Stock Market LLC (Nasdaq) and The Nasdaq Capital Market.

These rules impose various requirements on public companies, including requiring establishment and maintenance of effective disclosure and financial controls and appropriate corporate governance practices. Our management and other personnel have devoted and will continue to devote a substantial amount of time to these compliance initiatives. Moreover, these rules and regulations increase our legal and financial compliance costs and make some activities more time-consuming and costly. For example, these rules and regulations make it more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. In addition, the listing requirements of The Nasdaq Capital Market require that we satisfy certain corporate governance requirements relating to director independence, stockholder meetings, approvals and voting, soliciting proxies, conflicts of interest and a code of conduct. Our management and other personnel need to devote a substantial amount of time to ensure that we comply with all of these requirements. As a result, it may be difficult for us to attract and retain qualified persons to serve on our board of directors,Board, our boardBoard committees or as executive officers.

The Sarbanes-Oxley Act of 2002SOX requires, among other things, that we maintain effective internal controls for financial reporting and disclosure controls and procedures. As a result, we are required to periodically perform an evaluation of our internal controls over financial reporting to allow management to report on the effectiveness of those controls, as required by Section 404 of the Sarbanes-Oxley Act.SOX (Section 404). Additionally, our independent auditors may be required to perform a similar evaluation and report on the effectiveness of our internal controls over financial reporting. These efforts to comply with Section 404 and related regulations have required, and continue to require, the commitment of significant financial and managerial resources. While we anticipate maintaining the integrity of our internal controls over financial reporting and all other aspects of Section 404, we cannot be certain that a material weakness will not be identified when we test the effectiveness of our control systems in the future. If a material weakness is identified, we could be subject to sanctions or investigations by the U.S. Securities and Exchange Commission (the SEC),SEC, or other regulatory authorities, which would require additional financial and management resources, costly litigation or a loss of public confidence in our internal controls, which could have an adverse effect on the market price of our stock. See the risk factor entitled “Financial

We have a public float of less than $250.0 million and therefore qualify as a smaller reporting company under the rules of the SEC. As a smaller reporting company, we are able to take advantage of reduced disclosure requirements, such as simplified executive compensation disclosures and reduced financial statement disclosure requirements in our SEC filings. Decreased disclosures in our SEC filings due to our status as a smaller reporting company may make it harder for investors to analyze our results of operations and financial prospects. We cannot predict if investors will find our Common Stock less attractive if we rely on these exemptions. If some investors find our Common Stock less attractive as a result, there may be a less active trading market for our Common Stock and our stock price may be more volatile. We may take advantage of the United States require well definedreporting exemptions applicable to a smaller reporting company until we are no longer a smaller reporting company, which status would end once we have a public float greater than $250.0 million. In that event, we could still be a smaller reporting company if our annual revenues were below $100.0 million and we have a public float of less than $700.0 million.

We are an “emerging growth company,” as defined in the JOBS Act. Emerging growth companies can delay adopting new or revised accounting standards until such time as those standards apply to private companies. As an emerging growth company, we are not being required to comply with the auditor attestation requirements of Section 404, of the Sarbanes-Oxley Act, we have reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and we are exempt from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Additionally, as an emerging growth company, we have elected to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. As such, our financial statements may not be comparable to companies that comply with public company effective dates. We cannot predict if investors will find our stock less attractive because we may rely on these provisions. If some investors find our stock less attractive as a result, there may be a less active trading market for our shares and our stock price may be more volatile.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended

After we become a reporting company under the Exchange Act, weWe will remain an emerging growth company until the earliest of (i) the end of the fiscal year in which the market value of our common stock that is held by non-affiliates exceeds $700 million as of the end of the second fiscal quarter, (ii) the end of the fiscal year in which we have total annual gross revenues of $1.235billion$1.235 billion or more during such fiscal year, (iii) the date on which we issue more than $1 billion in non-convertible debt in a three-year period, or (iv) the end of the fiscal year following the fifth anniversary of the date of the first sale of our common stock pursuant to an effective registration statement filed under the Securities Act.

The patent positionrules of biotechnologyThe Nasdaq Capital Market also require that we maintain a closing price for shares of our Common Stock of at least $1.00 per share (the Minimum Bid Price Rule). On January 5, 2024, we received a letter (the Letter) from the Staff of Nasdaq indicating that we no longer met the Minimum Bid Price Rule set forth in Nasdaq Listing Rule 5550(a)(2) because the closing bid price for our Common Stock was less than $1.00 for the previous 30 consecutive business days. The Letter was in addition to the Notice (as defined below). The Letter had and biopharmaceutical companies is generally uncertain because it involves complex legal and factual considerations.has no immediate effect on our continued listing on The standards applied byNasdaq Capital Market. Under Nasdaq Listing Rule 5810(c)(3)(A), we have a 180-calendar day period, or until July 3, 2024 (the Compliance Date), to regain compliance with the U.S. PTO and foreign patent offices in granting patents are not always applied uniformly or predictably. For example, there is no uniform worldwide policy regarding patentable subject matter orMinimum Bid Price Rule. The Minimum Bid Price Rule will be met if our Common Stock has a minimum closing bid price of at least $1.00 per share for a minimum of 10 consecutive business days during the scope of claims allowable in biotechnology and biopharmaceutical patents. Consequently, a patent may not issue from our pending patent applications. Therefore,180-calendar day period, unless Nasdaq exercises its discretion to extend such 10‑day period. If we do not knowregain compliance by the degreeCompliance Date, we may be eligible for an additional 180-calendar day period, subject to satisfying the conditions in the applicable Nasdaq Listing Rules. If, before the Compliance Date, our Common Stock has a closing bid price of future protection$0.10 per share or less for ten consecutive trading days, the Staff (as defined below) will issue a Staff Delisting Determination under Nasdaq Listing Rule 5810 with respect to our Common Stock. On January 29, 2024, we filed an amendment to our Charter to implement the January 2024 Reverse Stock Split to attempt to regain compliance with the Minimum Bid Price Rule. Nasdaq subsequently reported that our Common Stock had a closing bid price above $1.00 per share for 10 consecutive trading days during the 180-day period, but Nasdaq exercised its discretion to extend the 10-day period and did not deem that we regained compliance with the Minimum Bid Price Rule. There can be no assurance that we will have onbe able to regain compliance or that the bid price of our Common Stock will remain above the minimum $1.00 bid price required for any proprietary productpost-split Nasdaq monitoring period or technologyotherwise. We will likely need to effect an additional reverse stock split of our Common Stock in an effort to regain compliance with the Minimum Bid Price Rule, but there can be no assurance that such a split may be approved or completed.

On November 22, 2023, we received a letter from the Listing Qualifications Department (the Staff) of The Nasdaq Stock Market LLC (Nasdaq) notifying us that we are not in compliance with the minimum stockholders’ equity requirement for continued listing on The Nasdaq Capital Market (the Notice) based on the information provided in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2023. Nasdaq Listing Rule 5550(b)(1) requires that companies listed on The Nasdaq Capital Market with a market value of listed securities of less than $35.0 million and annual net income of less than $0.5 million maintain stockholders’ equity of at least $2.5 million (the Stockholders’ Equity Requirement). In accordance with Nasdaq rules, we were provided until January 8, 2024 to submit a plan to regain compliance with the Stockholders’ Equity Requirement (the Compliance Plan). The Notice has no immediate effect on our continued listing on The Nasdaq Capital Market, subject to our compliance with other continued listing requirements. On January 22, 2024, the Staff granted us an extension until May 20, 2024 to regain compliance with the Stockholders’ Equity Requirement. Per the Staff’s January 22, 2024 letter, we must complete an equity offering to raise gross proceeds of at least $6.0 million (the Equity Offering) and furnish to the Staff and Nasdaq evidence of compliance with the Stockholders’ Equity Requirement by filing a publicly available report prior to May 24, 2024. While we have or may develop.completed the Equity Offering, the proceeds were insufficient for us to regain compliance with the Stockholders’ Equity Requirement such that we will need to raise substantial additional funds in the

near term. If we fail to evidence compliance with the Stockholders’ Equity Requirement in our Quarterly Report for the quarter ending June 30, 2024, we may be delisted. There can be no assurance that we will be able to regain compliance.

Unless our Common Stock is listed on a national securities exchange, such as The Nasdaq Capital Market, our Common Stock may also be subject to the regulations and restrictions regarding trading in “penny stocks,” which are unablethose securities trading for less than $5.00 per share, and that are not otherwise exempted from the definition of a penny stock under other exemptions provided for in the applicable regulations. These requirements and regulations could severely limit the liquidity of securities in the secondary market because fewer brokers or dealers would likely to obtain and maintain patent protection forbe willing to undertake related compliance activities. If our technology and products or if the scope of the patent protection obtainedCommon Stock is not sufficiently broad, our competitors could developlisted on a national securities exchange, the rules and commercialize technology and products similar or identicalrestrictions regarding penny stock transactions may limit an investor’s ability to ours,sell to a third party and our ability to successfully commercialize our technology and productstrading activity in the secondary market may be impaired.reduced.

Our commercial successFurther, our failure to maintain compliance with applicable Nasdaq listing requirements will dependalso cause us to fail to meet the equity conditions for us to require the exercise the Series T Warrants and may result in part on obtainingour being liable for penalties in our various investor agreements. Any of these or the above circumstances could adversely affect our business, results of operation, prospects and maintaining patent protection and trade secret protection in the United States and other countries with respect to ADAIRvalue of shares of our Common Stock.

A delisting for this reason or any other future product, such as ADMIR, that we may license or acquire and the methods we use to manufacture them, as well as successfully defending these patents and trade secrets against third-party challenges. We seek to protect our proprietary position by filing patent applications in the United States and abroad related to our proposed products. We will only be able to protect our technologies from unauthorized use by third parties to the extent that valid and enforceable patents or trade secrets cover them.

We legally effected the January 2024 Reverse Stock Split on January 29, 2024 and on January 30, 2024, our Common Stock began trading on a post-split basis. There is no assurance that the January 2024 Reverse Stock Split has not and will not cause an actual decline in the value of our outstanding Common Stock. The trading volume of our shares following the April 2023 Reverse Stock Split has varied, and shares of our Common Stock may have been less liquid as a result of the April 2023 Reverse Stock Split. The liquidity of the shares of our Common Stock may be required to consult with or cede control to collaborators regardingaffected adversely by the prosecution, maintenance, and enforcementJanuary 2024 Reverse Stock Split given the reduced number of shares outstanding following the January 2024 Reverse Stock Split, especially if the market price of our patents. Therefore, these patentsCommon Stock does not increase as a result of the January 2024 Reverse Stock Split. In addition, the January 2024 Reverse Stock Split may have increased the number of stockholders who own odd lots (less than 100 shares) of our Common Stock, creating the potential for such stockholders to experience an increase in the cost of selling their shares and applicationsgreater difficulty effecting such sales. We expect to need to complete an additional reverse stock split of our Common Stock given that our current bid price does not comply with the Minimum Bid Price Rule, but there can be no assurance that such a split will be approved or completed.

Although we believe that a higher market price of our Common Stock may help generate greater or broader investor interest, there can be prosecuted and enforcedno assurance that a reverse stock split, including the January 2024 Reverse Stock Split, will result in a manner consistent withshare price that will attract new investors, including institutional investors. In addition, there can be no assurance that the best interestsmarket price of our business.

The rules dealing with U.S. federal, state and local income taxation are constantly under review by the Internal Revenue Service, the U.S. Treasury Department, and other governmental bodies. Changes to tax laws (which changes may not issue in a form that will provide us with any meaningful protection, prevent competitors from competing withhave retroactive application) could adversely affect us or otherwise provide us with any competitive advantage. Our competitors may be ableholders of our Common Stock. In recent years, many such changes have been made and changes are likely to circumvent our owned or licensed patents by developing similar or alternative technologies or products in a non-infringing manner.

An active, liquid and orderly market for our common stock may not be maintained.

The trading market for our common stockCommon Stock will be influenced by the research and reports that industry or securitiesequity research analysts may publish about us and our business,business. Equity research analysts have not currently elected and may not elect to provide research coverage of our Common Stock, and such lack of research coverage may adversely affect the market orprice of our competitors. We doCommon Stock. In the event we have equity research analyst coverage, we will not have any control over these analysts and analysts may not provide favorable coverage, or any coverage at all. If any of the analysts, that do cover us make an adverse recommendation regardingor the content and opinions included in their reports. The price of our Common Stock could decline if one or more equity research analysts downgrade our stock or provideissue other unfavorable commentary or research. If one or more favorable relative recommendations about our competitors, our stock price would likely decline. If any analyst who may cover us were to ceaseequity research analysts ceases coverage of our companyus or failfails to regularly publish reports on us weregularly, demand for our Common Stock could lose visibility in the financial markets,decrease, which in turn could cause our sharestock price or trading volume to decline.

We and certain of our officers and directors may become defendants in one or more future stockholder derivative actions or other class-action lawsuits. These lawsuits would divert our management’s attention and resources from our ordinary business operations, and we would likely incur significant expenses associated with their defense (including, without limitation, substantial attorneys’ fees and other fees of professional advisors and potential obligations to indemnify current and former officers and directors who are or may become parties to such actions). If these lawsuits do not intendarise, we may be required to declare cash dividendspay material damages, consent to injunctions on future conduct and/or suffer other penalties, remedies or sanctions. In addition, any such future stockholder lawsuits could adversely impact our reputation, our ability to continue to develop our product candidates, thereby harming our ability to generate revenue. Accordingly, the ultimate resolution of these matters could have a material adverse effect on our common stock in the foreseeable future, stockholders must rely on appreciationbusiness, financial condition, results of the value of our common stock for any return on their investment.

Certain provisions of our amended and restated certificate of incorporation (Charter) and our amended and restated bylaws (the Bylaws) and applicable provisions of Delaware law may delay or discourage transactions involving an actual or potential change in control or change in our management, including transactions in which stockholders might otherwise receive a premium for their shares, or transactions that our stockholders might otherwise deem to be in their best interests. The provisions in our amendedCharter and restated certificate of incorporation and amended and restated bylaws:Bylaws:

In addition, once we become a publicly traded corporation, Section 203 of the Delaware General Corporation Law may limit our ability to engage in any business combination with a person who beneficially owns 15% or more of our outstanding voting stock unless certain conditions are satisfied. This

restriction lasts for a period of three years following the share acquisition. These provisions may have the effect of entrenching our management team and may deprive stockholders’ of the opportunity to sell their shares to potential acquirers at a premium over prevailing prices. This potential inability to obtain a control premium could reduce the price of our common stock. See Exhibit 4.5 “Description

Furthermore, our Charter specifies that, unless we consent in writing to the selection of Capital Stock”an alternative forum, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for additional information.

Our executive offices are located at 100 N. 18th Street, Suite 300, Philadelphia, PA 19103.2223 Avenida de La Playa #208, La Jolla, CA 92037, where we lease approximately 1,100 square feet of office space under a lease that expires in March 2024. We believe that our facilities are adequate to meet our current needs.

We are not currently a party to any material legal proceedings.proceedings , and we are not aware of any pending or threatened legal proceeding against us that we believe could have an adverse effect on our business, operating results or financial condition.

Our common stockCommon Stock is tradedcurrently listed on The Nasdaq Capital Market under the symbol “VLON”.“GRI.” As of February 4, 2023,March 1, 2024, there were 7 holders of record of our common stock. As of such date, there were 13,482,3423,196,488 shares of our commonCommon Stock and no shares of preferred stock outstanding. The actual numberoutstanding and held by approximately 17 stockholders of stockholders is greater than this number of record holders, and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers and other nominees. This number of holders of record also does not include stockholders whose shares may be held in trust by other entities.record.

We have not declared or paid any cash or other dividends on our common stock, and we do not expect to declare or pay any cash or other dividends in the foreseeable future.

Our lead product candidate, GRI-0621, is an oral inhibitor of iNKT cells. GRI-0621 is also an oral formulation of tazarotene, a synthetic RAR-beta and gamma selective agonist, that is approved in the following discussionUnited States for topical treatment of psoriasis and analysis.acne. As of December 31, 2023, 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 and 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, PSC, NASH, ALD,SLE, MS, UC patients as well as other indications. In these patients activated iNKT cells are correlated with more severe disease. In December 2023, we commenced enrollment in our Phase 2a trial and we expect topline results from this trial to be available in the second half of 2024.

On February 1, 2024, we engaged Ladenburg Thalmann & Co. Inc. (Ladenburg) to evaluate our strategic alternatives with the goal of maximizing stockholder value. Ladenburg was engaged to advise on the strategic review process, which could have included, without limitation, exploring the potential for a possible merger, business combination, investment into us, or a purchase, license or other acquisition of assets. In conjunction with the exploration of strategic alternatives, we streamlined operations to preserve our capital and cash resources.

On April 21, 2023, we consummated the Merger with GRI surviving as a wholly-owned subsidiaryOperations pursuant to the Merger Agreement. In connection with the Closing, we amended our certificate of Vallon (the Merger). The Merger will result in a clinical-stage biotechnology company focused on discovering, developing,incorporation and commercializing innovative therapies targeting serious diseases associated with dysregulated immune responses that leadbylaws to inflammatory, fibrotic, and autoimmune disorders.change our name from “Vallon Pharmaceuticals, Inc.” to “GRI Bio, Inc.”

At the effective time of the Merger (the Effective Time), eachTime:

Each share of GRI Operations’ common stock of GRI, $0.01 par value per share (GRI Operations Common Stock) outstanding immediately prior to the Effective Time, excluding any dissenting shares but including any shares of GRI Operations Common Stock issued pursuant to the concurrent equity financing will beEquity Financing (as defined below) automatically converted solely into the right to receive a number of shares of common stockthe Common Stock equal to 0.0374 (the Exchange Ratio).

In connection with signing the Merger Agreement, GRI Operations entered into a Securities Purchase Agreement, dated as of December 13, 2022 (the Bridge SPA) with the Altium, pursuant to which, among other things, the selling stockholder purchased, and GRI Operations issued, senior secured notes in the aggregate principal amount of up to approximately $3.3 million, in exchange ratio,for an aggregate purchase price of up to approximately $2.5 million (the Bridge Notes). In addition, GRI Operations issued to Altium warrants to purchase an aggregate of 357,854 shares of GRI Operations Common Stock (the Bridge Warrants). As a result of the Merger, at the Effective Time, the Bridge Warrants were exchanged for the Exchange Warrants. The Exchange Warrants contain substantively similar terms to the Bridge Warrants and have an initial exercise price equal to $103.11 per share. The exercise price of the Exchange Warrants is subject to adjustment for splits and similar recapitalization events.

In addition to the proposed reverse stock splitBridge SPA, in connection with signing the Merger Agreement, the Company, GRI Operations and Altium entered into a Securities Purchase Agreement, dated as of Vallon Common StockDecember 13, 2022 (the Equity SPA). Pursuant to be implementedthe Equity SPA, immediately prior to the consummationClosing, GRI Operations issued 969,602 shares of GRI Operations Common Stock (the Initial Shares) to Altium and 3,878,411 shares of GRI Operations Common Stock (the Additional Shares) into escrow with an escrow agent. At the Closing, pursuant to the Merger, the Initial Shares converted into an aggregate of 36,263 shares of Common Stock and the Additional Shares converted into an aggregate of 145,052 shares of Common Stock. On May 8, 2023, in accordance with the terms of the Merger as discussed in this Annual Report (the Reverse Split). The exchange ratio may be adjusted based on Vallon’s net cash at Closing and/or any reductionEquity SPA, the Company and Altium authorized the escrow agent to, Vallon’s valuation required in ordersubject to meet the initial listing requirements of The Nasdaq Stock Market LLC (Nasdaq).

Pursuant to the Equity SPA, we issued to Altium on May 8, 2023 (i) Series A-1 Warrants to purchase 181,316 shares of Common Stock with an initial exercise price of $94.57 per share, (ii) Series A-2 Warrants to purchase 163,185 shares of Common Stock with an initial exercise price of $103.18 per share (all of which have since been exercised), and (iii) Series T Warrants to purchase (x) 116,353 shares of Common Stock at an exercise price of $85.96 per share and (y) if the Series T Warrants are exercised in full by paying the aggregate exercise price in cash, an additional amount of Series A-1 Warrants and Series A-2 Warrants, each to purchase 116,353 shares of Common Stock at their respective exercise price (collectively, the Equity Warrants). We may only force the exercise of Series T Warrants subject to the satisfaction of certain equity conditions. The Series T Warrants are not presently subject to forced exercise by us as the Delta and Omicron variants), and supply chain and labor shortages.equity conditions for their forced exercise, which include, among other things, a requirement that shares of Common Stock have a value weighted average price of at least $64.47 per share for the periods specified in the Series T Warrants, are not met. In light of these developments,connection with the full impactissuance of the COVID-19 pandemic on our business and operations remains uncertain and will vary depending onsecurities pursuant to the pandemic’s future impact onPurchase Agreement, the third parties with whom we do business, as well as any legalexercise of the Series A-1 Warrants was reduced to par, or regulatory consequences resulting therefrom. To$0.0001, per share pursuant to the extent possible, we are conducting business as usual, with necessary or advisable modifications to employee travel and with mostterms of its employees and consultants working remotely. We will continue to actively monitor the COVID-19 pandemic and may take further actions that alter its operations, including those that may be required by federal, state or local authorities, or that it determines are in the best interests of its employees and other third parties with whom we do business.Series A-1 Warrants.

Estimating the fair value of option shares issued under the employee stock purchase plan requires the input of subjective assumptions, including the estimated fair value of our common stock, the expected life of the option, stock price volatility, the risk-free interest rate and expected dividends. The assumptions used in our Black-Scholes option-pricing model represent management's best estimates and involve a number of variables, uncertainties and assumptions and the application of management's judgment, as they are inherently subjective. If any assumptions change, our stock-based compensation expense could be materially different in the future.

These assumptions used in our Black-Scholes option-pricing model are estimated as follows:

Our research and development expenses have consisted primarily of in-process research and development expenses, costs incurred in preparing for and conducting therelated to our development program for ADAIR, working on commercial manufacturing of ADAIR and developing formulations for ADMIR. Research and development costs are expensed as incurred.our lead product candidate GRI-0621. These expenses include:

product candidates.

We expect our general and administrative expenses will increase substantially 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, directorsdirectors’ and officersofficers’ insurance, legal and accounting costs and investor relations costs. Our general and administrativecosts, as well as an increase in personnel expenses have increased are expected to continue to increase due to increases in professional and advisory fees as a result of the proposed Merger.

On August 22, 2023, we entered into Asset Purchase Agreement (the Aardvark Agreement) with Aardvark Therapeutics, Inc. (Aardvark), pursuant to which Aardvark agreed to purchase (i) our common stock whenlicense agreement with Medice Arzneimittel Pűtter GmbH & Co. KG, dated January 6, 2020, (ii) certain patents related to our ADAIR product candidate, and (iii) files (of contract manufacturing and FDA correspondence) for a formulation described in IND No. 133072, ADAIR for the warrants are exercised, or will be extinguished upon expiryTreatment of Attention Deficit/Hyperactivity Disorder (ADHD) and Narcolepsy, filed with the United States FDA. Under the terms of the warrant term. Upon exercise,Agreement, we received an upfront cash payment of $0.3 million, which was recognized as other income. We are also eligible to receive potential additional milestone payments contingent upon Aardvark achieving certain future ADAIR regulatory and sales milestones. Other than the intrinsic valueupfront payment, we do not anticipate the receipt of any milestone payments from Aardvark in the near term, which potential milestone payments may or may not be achieved, paid or received in the future.

Extinguishment of debt consists of expense recognized as a result of the shares issued will be transferredamendment of certain tranches of convertible promissory notes (the TEP Notes) held by TEP. The amendment was accounted for as extinguishment to stockholders’ equity. The difference betweenwhich the intrinsic value of the stock issued and theexcess fair value of the warrant is recorded as gain oramended debt over the carrying value of the original debt resulted in a loss on the exchange in the accompanying Statements of Operations and Comprehensive Loss in the period of exercise.extinguishment.

early adoption prohibited. We are currently evaluating the impact of this update and its effective dates but do not expect the update to have a material effect on our financial statements.

We are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the Accountinglast day of any fiscal year for Income Taxes. ASU 2019-12 simplifiesso long as either (1) the accounting for income taxesmarket value of our shares of Common Stock held by removing certain exceptions tonon-affiliates does not equal or exceed $250.0 million as of the general principals in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending the existing guidance. The adoption of this standardprior June 30th, or (2) our annual revenues did not have a material impact onequal or exceed $100.0 million during such completed fiscal year and the market value of our shares of Common Stock held by non-affiliates did not equal or exceed $700.0 million as of the prior June 30th. To the extent we take advantage of any reduced disclosure obligations, it may make comparison of our financial statements.