Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2024 | May 06, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2024 | |
Document Transition Report | false | |
Entity File Number | 001-40034 | |
Entity Registrant Name | GRI BIO, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 82-4369909 | |
Entity Address, Address Line One | 2223 Avenida de la Playa | |
Entity Address, Address Line Two | #208 | |
Entity Address, City or Town | La Jolla | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 92037 | |
City Area Code | 619 | |
Local Phone Number | 400-1170 | |
Title of 12(b) Security | Common Stock, par value $0.0001per share | |
Trading Symbol | GRI | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 3,774,488 | |
Entity Central Index Key | 0001824293 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 4,091 | $ 1,808 |
Prepaid expenses and other current assets | 337 | 1,126 |
Total current assets | 4,428 | 2,934 |
Property and equipment, net | 7 | 8 |
Operating lease right-of-use assets | 152 | 14 |
Total assets | 4,587 | 2,956 |
Current liabilities: | ||
Accounts payable | 637 | 1,410 |
Accrued expenses | 999 | 1,270 |
Warrant liability | 1 | 3 |
Operating lease liabilities, current | 43 | 14 |
Total current liabilities | 1,680 | 2,697 |
Operating lease liabilities, non-current | 109 | 0 |
Total liabilities | 1,789 | 2,697 |
Commitments and contingencies (Note 11) | ||
Stockholders' equity: | ||
Common stock, $0.0001 par value; 250,000,000 shares authorized as of March 31, 2024 and December 31, 2023; 3,196,488 and 645,738 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively | 0 | 0 |
Additional paid-in-capital | 36,218 | 31,792 |
Accumulated deficit | (33,420) | (31,533) |
Total stockholders’ equity | 2,798 | 259 |
Total liabilities and stockholders' equity | $ 4,587 | $ 2,956 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2024 | Dec. 31, 2023 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in usd per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 250,000,000 | 250,000,000 |
Common stock, shares issued (in shares) | 3,196,488 | 645,738 |
Common stock, shares outstanding (in shares) | 3,196,488 | 645,738 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Operating expenses: | ||
Research and development | $ 933 | $ 116 |
General and administrative | 962 | 872 |
Total operating expenses | 1,895 | 988 |
Loss from operations | (1,895) | (988) |
Change in fair value of warrant liability | 2 | 0 |
Interest income (expense), net | 6 | (1,162) |
Net loss | $ (1,887) | $ (2,150) |
Net loss per share of common stock, basic (in usd per share) | $ (0.46) | $ (15.04) |
Net loss per share of common stock, diluted (in usd per share) | $ (0.46) | $ (15.04) |
Weighted-average common shares outstanding, basic (in shares) | 4,127,448 | 142,988 |
Weighted-average common shares outstanding, diluted (in shares) | 4,127,448 | 142,988 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders’ Equity (Deficit) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit |
Beginning balance (in shares) at Dec. 31, 2022 | 142,820 | |||
Beginning balance at Dec. 31, 2022 | $ (1,625) | $ 0 | $ 16,871 | $ (18,496) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Stock-based compensation | 13 | 13 | ||
Restricted stock vesting (in shares) | 67 | |||
Warrant issuance | 532 | 532 | ||
Net loss | (2,150) | (2,150) | ||
Ending balance (in shares) at Mar. 31, 2023 | 142,887 | |||
Ending balance at Mar. 31, 2023 | $ (3,230) | $ 0 | 17,416 | (20,646) |
Beginning balance (in shares) at Dec. 31, 2023 | 645,738 | 645,738 | ||
Beginning balance at Dec. 31, 2023 | $ 259 | $ 0 | 31,792 | (31,533) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Stock-based compensation | 37 | 37 | ||
Fractional share adjustment (in shares) | (250) | |||
Issuance of common stock and prefunded warrants in financing (in shares) | 330,450 | |||
Issuance of common stock and prefunded warrants in financing | 4,389 | 4,389 | ||
Prefunded warrant exercise (in shares) | 2,220,550 | |||
Net loss | $ (1,887) | (1,887) | ||
Ending balance (in shares) at Mar. 31, 2024 | 3,196,488 | 3,196,488 | ||
Ending balance at Mar. 31, 2024 | $ 2,798 | $ 0 | $ 36,218 | $ (33,420) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Operating activities: | ||
Net loss | $ (1,887) | $ (2,150) |
Adjustments to reconcile net loss to cash used in operating activities: | ||
Depreciation expense | 1 | 1 |
Amortization of debt discounts and issuance costs | 0 | 1,161 |
Stock-based compensation expense | 37 | 13 |
Change in fair value of warrant liability | (2) | 0 |
Reduction in operating lease right of use assets | 14 | 12 |
Change in operating assets and liabilities: | ||
Prepaid expenses and other current assets | 564 | 28 |
Accounts payable | (744) | 408 |
Accrued expenses | (172) | (36) |
Operating lease liabilities | (14) | (16) |
Cash used in operating activities | (2,203) | (579) |
Financing activities: | ||
Advances from employees | 0 | 190 |
Repayment of advances from employees | 0 | (195) |
Proceeds from issuance of bridge promissory note | 0 | 1,250 |
Proceeds from issuance of common stock and prefunded warrants | 5,500 | 0 |
Payment of stock issuance costs | (1,014) | (110) |
Payment of debt issuance costs | 0 | (105) |
Cash provided by financing activities | 4,486 | 1,030 |
Net increase in cash and cash equivalents | 2,283 | 451 |
Cash and cash equivalents at beginning of period | 1,808 | 9 |
Cash and cash equivalents at end of period | 4,091 | 460 |
Supplemental disclosure of non-cash financing activities: | ||
Recognition of debt discount and additional paid-in-capital for issuance of warrants in connection with the issuance of promissory notes | 0 | 532 |
Recognition of right of use assets and lease liabilities | 152 | 0 |
Debt and stock issuance costs included in accounts payable | 97 | 45 |
Property and equipment purchases included in accounts payable | $ 0 | $ 8 |
ORGANIZATION AND DESCRIPTION OF
ORGANIZATION AND DESCRIPTION OF BUSINESS | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | ORGANIZATION AND DESCRIPTION OF BUSINESS GRI Bio, Inc. (GRI or the Company), based in La Jolla, CA, was incorporated in Delaware in May 2009. GRI is a clinical-stage biopharmaceutical company focused on discovering, developing, and commercializing innovative therapies that target serious diseases associated with dysregulated immune responses leading to inflammatory, fibrotic, and autoimmune disorders. The Company’s goal is to be an industry leader in developing therapies to treat these diseases and to improve the lives of patients suffering from such diseases. The Company’s lead product candidate, GRI-0621, is an oral inhibitor of type 1 Natural Killer T (iNKT) cells and is being developed for the treatment of severe fibrotic lung diseases such as idiopathic pulmonary fibrosis (IPF). The Company’s product candidate portfolio also includes GRI-0803 and a proprietary library of 500+ compounds. GRI-0803, the lead molecule selected from the library, is a novel oral agonist of type 2 Natural Killer T cells and is being developed for the treatment of autoimmune disorders, with much of its preclinical work in Systemic Lupus Erythematosus Disease (SLE) or lupus and multiple sclerosis (MS). Reverse Merger with Vallon Pharmaceuticals, Inc . On April 21, 2023, pursuant to the Agreement and Plan of Merger, dated as of December 13, 2022, as amended on February 17, 2023 (the Merger Agreement), by and among the Company, GRI Bio Operations, Inc., formerly known as GRI Bio, Inc. (GRI Operations), and Vallon Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of the Company (Merger Sub), Merger Sub was merged with and into GRI Operations (the Merger), with GRI Operations surviving the Merger as a wholly owned subsidiary of the Company (Note 4). In connection with the closing of the Merger (the Closing), the Company amended its certificate of incorporation and amended its bylaws to change its name from “Vallon Pharmaceuticals, Inc.” to “GRI Bio, Inc.” Recapitalization In connection with the Merger, and immediately prior to the effective time of the Merger (the Effective Time), the Company effected a reverse stock split of its common stock, par value $0.0001 (Common Stock), at a ratio of 1-for-30 (the April 2023 Reverse Stock Split). On January 29, 2024, the Company effected a reverse stock split of its Common Stock at a ratio of one-for-seven (the January 2024 Reverse Stock Split and together with the April 2023 Reverse Stock Split, the Reverse Stock Splits). Unless otherwise noted, all references to share and per share amounts in these consolidated financial statements reflect the Reverse Stock Splits. Basis of Presentation As discussed in Note 4, the Merger was accounted for as reverse recapitalization under which the historical financial statements of the Company prior to the Merger are the historical financial statements of the accounting acquirer, GRI Operations. All Common Stock, per share and related information presented in the consolidated financial statements and notes prior to the Merger has been retroactively adjusted to reflect the Exchange Ratio (as defined below) and the Reverse Stock Splits for all periods presented, to the extent applicable. |
LIQUIDITY
LIQUIDITY | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
LIQUIDITY | LIQUIDITY These unaudited interim consolidated financial statements have been prepared on the basis that the Company is a going concern, which contemplates, among other things, the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has not generated any significant revenues from operations since inception and does not expect to do so in the foreseeable future. The Company has incurred operating losses since its inception in 2009 and, as a result, has incurred $33,420 in accumulated deficit through March 31, 2024. The Company has financed its working capital requirements to date through the issuance of equity and debt securities. As of March 31, 2024, the Company had cash of approximately $4,091. In connection with signing the Merger Agreement, the Company, GRI Operations and Altium Growth Fund, LP (Altium) entered into a Securities Purchase Agreement, dated December 13, 2022 (the Equity SPA), pursuant to which Altium agreed to invest $12,250 in cash and cancel any outstanding principal and accrued interest on the Bridge Notes (as defined below) in return for the issuance of shares of GRI Operations common stock (GRI Operations Common Stock) immediately prior to the consummation of the Merger. Pursuant to the Equity SPA, immediately prior to the Closing, 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 for net proceeds of $11,704, after deducting offering expenses of $546. At the Closing, pursuant to the Merger, the Initial Shares converted into an aggregate of 36,263 shares of the Company’s Common Stock and the Additional Shares converted into an aggregate of 145,052 shares of the Company’s Common Stock. On May 8, 2023, in accordance with the terms of the Equity SPA, the Company and Altium authorized the escrow agent to, subject to beneficial ownership limitations, disburse to Altium all of the shares of the Company’s Common Stock issued in exchange for the Additional Shares. On February 1, 2024, the Company entered into a securities purchase agreement (the Purchase Agreement), pursuant to which the Company agreed to issue and sell, in a public offering, (i)330,450 shares (the Shares) of Common Stock, (ii) 4,669,550 pre-funded warrants (the Pre-Funded Warrants) exercisable for an aggregate of 4,669,550 shares of Common Stock, (iii) 5,000,000 Series B-1 common warrants (the Series B-1 Common Warrants) exercisable for an aggregate of 5,000,000 shares of Common Stock, and (iv)5,000,000 Series B-2 common warrants (the Series B-2 Common Warrants, and together with the Series B-1 Common Warrants, the Common Warrants) exercisable for an aggregate of 5,000,000 shares of Common Stock for net proceeds of $4,389, after deducting offering expenses of $1,110. The Common Warrants together with the Pre-Funded Warrants are referred to in this Quarterly Report on Form 10-Q as the “Warrants.” The securities were offered in combinations of (a) one Share or one Pre-Funded Warrant, together with (b) one Series B-1 Common Warrant and one Series B-2 Common Warrant, for a combined purchase price of $1.10 (less $0.0001 for each Pre-Funded Warrant). Subject to certain ownership limitations, the Warrants became exercisable upon issuance. Each Pre-Funded Warrant is exercisable for one share of Common Stock at a price per share of $0.0001 and does not expire. Each Series B-1 Common Warrant is exercisable into one share of Common Stock at a price per share of $1.10 for a five-year period after February 6, 2024, the date of issuance. Each Series B-2 Common Warrant is exercisable into one share of Common Stock at a price per share of $1.10 for an 18-month period after February 6, 2024 the date of issuance. In connection with the issuance of the Shares and Warrants 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. Based on the Company’s current operating plan, the Company believes that its existing cash and cash equivalents will be sufficient to fund its operating expenses and capital expenditure requirements into the third quarter of 2024. The Company’s ability to continue as a going concern is dependent on its ability to raise additional capital to fund its business activities, including its research and development program. The Series T Warrants issued in connection with the Merger are not presently subject to forced exercise by the Company as the 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. The Company intends to raise capital through additional issuances of equity securities and/or short-term or long-term debt arrangements, but there can be no assurances any such financing will be available when needed, even if the Company’s research and development efforts are successful. If the Company is not able to obtain additional financing on acceptable terms and in the amounts necessary to fully fund its future operating requirements, it may be forced to reduce or discontinue its operations entirely. Therefore, there is substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the issuance of these financial statements. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might result from this uncertainty. |
BASIS OF PRESENTATION AND SUMMA
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accompanying unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) for interim financial periods and pursuant to the rules of the Securities and Exchange Commission (the SEC). Any reference in the accompanying unaudited interim financial statements to “authoritative guidance” is meant to refer to GAAP as found in the Accounting Standards Codification (ASC) and Accounting Standards Updates (ASU) of the Financial Accounting Standards Board (FASB). The December 31, 2023 balance sheet was derived from the Company’s audited consolidated financial statements. In the opinion of management, the unaudited interim consolidated financial statements furnished herein include all normal and recurring adjustments considered necessary to present fairly the Company’s financial position as of March 31, 2024, and the consolidated results of operations and consolidated stockholders’ equity for the three months ended March 31, 2024 and 2023 and consolidated cash flows for the three months ended March 31, 2024 and 2023. Consolidated results of operations for the three months ended March 31, 2024, are not necessarily indicative of the consolidated operating results that may be expected for the year ending December 31, 2024. The unaudited interim consolidated financial statements, presented herein, do not contain the required disclosures under GAAP for annual consolidated financial statements. The accompanying unaudited interim consolidated financial statements should be read in conjunction with the annual audited consolidated financial statements and related notes as of and for the year ended December 31, 2023, included in the Company’s Annual Report on Form 10-K filed with the SEC on March 28, 2024. Principles of Consolidation The unaudited interim consolidated financial statements include the accounts of GRI Bio, Inc. and its wholly-owned subsidiary, GRI Bio Operations, Inc. All intercompany balances and transactions have been eliminated. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Estimates and assumptions are primarily made in relation to the valuation of share options, warrant issuance and subsequent revaluations, valuation allowances relating to deferred tax assets, accrued expenses and estimation of the incremental borrowing rate for the operating lease. If actual results differ from the Company’s estimates, or to the extent these estimates are adjusted in future periods, the Company’s consolidated results of operations could either benefit from, or be adversely affected by, any such change in estimate. Fair Value Measurements Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820, Fair Value Measurement , (ASC 820) establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The three levels of fair value hierarchy defined by ASC 820 are described below: Level 1 : Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. Level 2 : Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 3 : Pricing inputs that are generally unobservable inputs and not corroborated by market data. As of March 31, 2024, the Company’s financial instruments included cash, cash equivalents, prepaid expenses and other current assets, accounts payable, accrued expenses and certain liability classified warrants. The carrying amounts reported in the balance sheets for cash, prepaid expenses and other current assets, accounts payable and accrued expenses approximate their fair value based on the short-term maturity of these instruments. The Company recognizes transfers between levels of the fair value hierarchy on the date of the event or change in circumstances that caused the transfer. At March 31, 2024, there were no financial assets or liabilities measured at fair value on a recurring basis other than the liability classified warrants. In May 2022, Vallon Pharmaceuticals, Inc. (Vallon) issued warrants in connection with a securities purchase agreement. Vallon evaluated the warrants in accordance with ASC 815-40, Derivatives and Hedging — Contracts in Entity’s Own Equity (ASC 815-40), and concluded that a provision in the warrants related to the reduction of the exercise price in certain circumstances precluded the warrants from being accounted for as components of equity. As a result, the warrants were recorded as a liability on the balance sheet. Vallon recorded the fair value of the warrants upon issuance using a Black-Scholes valuation model. The Company is required to revalue the warrants at each reporting date with any changes in fair value recorded in its statement of operations. The valuation of the warrants is considered under Level 3 of the fair value hierarchy due to the need to use assumptions in the valuation that are both significant to the fair value measurement and unobservable. The change in the fair value of the Level 3 warrants liabilities is reflected in the statement of operations for the three months ended March 31, 2024. Net Loss Per Common Share Basic and diluted net loss per common share is computed based on the weighted average number of shares of common stock outstanding during each year. Diluted net loss per common share is computed based on the weighted average number of shares of common stock outstanding during each year, plus the dilutive effect of options considered to be outstanding during each year, in accordance with ASC 260, Earnings Per Share . As the Company had a net loss in each of the three months ended March 31, 2024 and 2023, diluted net loss per common share is the same as basic net loss per common share for the period because the effects of potentially dilutive securities are antidilutive. Common stock equivalents excluded from the diluted net loss per common share calculations are as follows: March 31, 2024 2023 Stock options 32,642 12,781 Warrants 10,298,553 14,822 Restricted stock with repurchase rights — 23,433 10,331,195 51,036 Recent Accounting Pronouncements The Company considered the applicability and impact of all ASUs issued during the quarter ended March 31, 2024 and each was determined to be either not applicable or expected to have minimal impact on these consolidated financial statements. |
MERGER WITH VALLON
MERGER WITH VALLON | 3 Months Ended |
Mar. 31, 2024 | |
Business Combination and Asset Acquisition [Abstract] | |
MERGER WITH VALLON | MERGER WITH VALLON On April 21, 2023, pursuant to the Merger Agreement, Merger Sub was merged with and into GRI Operations, with GRI Operations surviving the Merger as a wholly owned subsidiary of the Company. In connection with the Closing, the Company amended its certificate of incorporation and bylaws to change its name from “Vallon Pharmaceuticals, Inc.” to “GRI Bio, Inc.” At the Effective Time: (a) Each share of GRI Operations Common Stock outstanding immediately prior to the Effective Time, including any shares of GRI Operations Common Stock issued pursuant to the Equity SPA automatically converted solely into the right to receive a number of shares of the Company’s Common Stock equal to 0.0374 (the Exchange Ratio). (b) Each option to purchase shares of GRI Operations Common Stock (each, a GRI Operations Option) outstanding and unexercised immediately prior to the Effective Time under the GRI Bio, Inc. 2015 Equity Incentive Plan, as amended (the GRI Operations Plan), whether or not vested, converted into and became an option to purchase shares of the Company’s Common Stock, and the Company assumed the GRI Operations Plan and each such GRI Operations Option in accordance with the terms of the GRI Operations Plan (the Assumed Options). The number of shares of Common Stock subject to each Assumed Option was determined by multiplying (i) the number of shares of GRI Operations Common Stock that were subject to such GRI Operations Option, as in effect immediately prior to the Effective Time, by (ii) the Exchange Ratio, and rounding the resulting number down to the nearest whole number of shares of Common Stock. The per share exercise price for the Common Stock issuable upon exercise of each Assumed Option was determined by dividing (A) the per share exercise price of such Assumed Option, as in effect immediately prior to the Effective Time, by (B) the Exchange Ratio and rounding the resulting per share exercise price up to the nearest whole cent. Any restriction on the exercise of any Assumed Option continued in full force and effect and the term, exercisability, vesting schedule, and any other provisions of such Assumed Option otherwise remained unchanged. (c) Each warrant to purchase shares of GRI Operations Common Stock (the GRI Operations Warrants) outstanding immediately prior to the Effective Time was assumed by the Company and converted into a warrant to purchase shares of Common Stock (the Assumed Warrants) and thereafter (i) each Assumed Warrant became exercisable solely for shares of the Common Stock; (ii) the number of shares of Common Stock subject to each Assumed Warrant was determined by multiplying (A) the number of shares of GRI Operations Common Stock that were subject to such GRI Operations Warrant, as in effect immediately prior to the Effective Time, by (B) the Exchange Ratio, and rounding the resulting number down to the nearest whole number of shares of Common Stock; (iii) the per share exercise price for shares of Common Stock issuable upon exercise of each Assumed Warrant was determined by dividing (A) the exercise price per share of GRI Operations Common Stock subject to such GRI Operations Warrant, as in effect immediately prior to the Effective Time, by (B) the Exchange Ratio, and rounding the resulting exercise price up to the nearest whole cent. (d) The Bridge Warrants (Note 8) were exchanged for warrants (the Exchange Warrants) to purchase an aggregate of 60,227 shares of the Company’s Common Stock. The Exchange Warrants contain substantively similar terms to the Bridge Warrants, and have an initial exercise price equal to $103.11 per share. (e) All rights with respect to GRI Operations restricted stock awards were assumed by the Company and converted into Company restricted stock awards with the number of shares subject to each restricted stock award multiplied by the Exchange Ratio and rounding the resulting number down to the nearest whole number of shares of the Company’s Common Stock. The term, exercisability, vesting schedule and other provisions of the GRI Operations restricted stock awards otherwise remained unchanged. The Merger was accounted for as a reverse recapitalization under GAAP because the primary assets of Vallon were cash and cash equivalents. For accounting purposes, GRI Operations was determined to be the accounting acquirer based upon the terms of the Merger and other factors including: (i) the equity holders of GRI Operations immediately prior to the Merger owned, or held rights to acquire, in the aggregate approximately 85% of the outstanding shares of the Company’s Common Stock and the Company’s stockholders immediately prior to the Merger owned approximately 15% of the outstanding shares of the Company’s Common Stock (ii) GRI Operations holds the majority (4 out of 5) of board seats of the combined company, and (iii) GRI Operations’ management holds the majority of key positions in the management of the combined company. Immediately after the Merger, there were 422,333 shares of the Company’s Common Stock outstanding. The following table shows the net liabilities assumed in the Merger: April 21, 2023 Cash and cash equivalents $ 941 Prepaid and other assets 310 Accounts payable and accrued expenses (4,190) Total net liabilities assumed (2,939) Plus: Transaction costs (2,984) Total net liabilities assumed plus transaction costs $ (5,923) |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The Company applies the guidance in ASC 820 to account for financial assets and liabilities measured on a recurring basis. Fair value is measured as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or liability. The Company uses a fair value hierarchy, which distinguishes between assumptions based on market data (observable inputs) and an entity's own assumptions (unobservable inputs). The guidance requires that fair value measurements be classified and disclosed in one of the following 3 categories: Level 1 : Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2 : Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liabilities; and Level 3 : Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). Determining which category an asset or liability falls within the hierarchy requires significant judgment. The Company evaluates its hierarchy disclosures each reporting period. There were no transfers between Level 1, 2 and 3 during the three months ended March 31, 2024. The following table presents, for each of the fair value hierarchy levels required under ASC 820, the Company’s liabilities that are measured at fair value on a recurring basis at March 31, 2024: Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Other Unobservable Inputs (Level 3) Liabilities: Warrant liability $ — $ — $ 1 Total liabilities $ — $ — $ 1 The following table presents the changes in the fair value of the Level 3 liability: Warrant Liability Fair value as of December 31, 2023 $ 3 Change in valuation (2) Fair value as of March 31, 2024 $ 1 The Black-Scholes valuation model was used to estimate the fair value of the warrants with the following weighted-average assumptions: March 31, 2024 December 31, 2023 Volatility 211.9 % 171.0 % Expected term in years 2.5 2.5 Dividend rate 0.0 % 0.0 % Risk-free interest rate 4.50 % 4.12 % |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 3 Months Ended |
Mar. 31, 2024 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT March 31, 2024 December 31, 2023 Computer equipment $ 21 $ 21 Furniture and fixtures 13 13 34 34 Accumulated depreciation (27) (26) $ 7 $ 8 |
ACCRUED EXPENSES
ACCRUED EXPENSES | 3 Months Ended |
Mar. 31, 2024 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES | ACCRUED EXPENSES Accrued expenses consist of the following: March 31, 2024 December 31, 2023 Research and development $ 191 $ 93 General and administrative 52 441 Payroll and related 756 736 Total accrued expenses $ 999 $ 1,270 |
PROMISSORY NOTES
PROMISSORY NOTES | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
PROMISSORY NOTES | PROMISSORY NOTES Bridge Financing 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 Altium, pursuant to which GRI Operations issued senior secured promissory notes (Bridge Notes) in the aggregate principal amount of $3,333, in exchange for an aggregate purchase price of $2,500. The Bridge Notes were issued in two closings: (i) the first closing for $1,667 in aggregate principal amount (in exchange for an aggregate purchase price of $1,250) closed on December 14, 2022; and (ii) the second closing for $1,667 in aggregate principal amount (in exchange for an aggregate purchase price of $1,250) closed on March 9, 2023. The Bridge Notes were secured by a lien on all of the Company’s assets. In addition, upon the funding of each tranche, Altium received warrants to purchase an aggregate of 178,927 shares of Common Stock (the Bridge Warrants). The Bridge Warrants had an exercise price of $9.31 per share, were exercisable at any time on or after the applicable issuance date and had a term of 60 months from the date all shares underlying the Bridge Warrants were freely tradable. The $1,250 of proceeds from the first closing were allocated to the Bridge Notes and Bridge Warrants based on their relative fair values as of the commitment date, resulting in an allocation of $679 and $571, respectively. The $1,250 of proceeds from the second closing were allocated to the Bridge Notes and Bridge Warrants based on their relative fair values as of the commitment date, resulting in an allocation of $718 and $532, respectively. In addition to the Bridge SPA, and also in connection with signing the Merger Agreement, the Company, GRI Operations and Altium entered into the Equity SPA (Note 9) pursuant to which Altium agreed to invest $12,250 in cash and cancel any outstanding principal and accrued interest on the Bridge Notes in return for the issuance of shares of GRI Operations’ Common Stock immediately prior to the consummation of the Merger. On April 21, 2023, the Company completed the Merger and the outstanding principal and accrued interest on the Bridge Notes was cancelled and 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 subject to adjustments for splits and recapitalization events. The Bridge Notes were accounted for as share-settled debt under the accounting guidance in ASC 835-30 and, as such, the initial net carrying amounts were accreted to the redemption amounts using the effective interest method. The Company incurred $295 of debt issuance costs related to its issuance of debt under the Bridge SPA, of which $90 was incurred during the three months ended March 31, 2023. Interest expense stemming from amortization of debt discounts and issuance costs was $1,161 for the three months ended March 31, 2023. |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 3 Months Ended |
Mar. 31, 2024 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | STOCKHOLDERS’ EQUITY In connection with signing the Merger Agreement, the Company, GRI Operations and Altium entered the Equity SPA pursuant to which Altium agreed to invest $12,250 in cash and cancel any outstanding principal and accrued interest on the Bridge Notes in return for the issuance of shares of GRI Operations’ Common Stock immediately prior to the consummation of the Merger. Pursuant to the Equity SPA, immediately prior to the Closing, GRI Operations issued the Initial Shares to Altium and the Additional Shares into escrow with an escrow agent for net proceeds of $11,704, after deducting offering expenses of $546. 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 Equity SPA, the Company and Altium authorized the escrow agent to, subject to beneficial ownership limitations, disburse to Altium all of the shares of the Common Stock issued in exchange for the Additional Shares. On February 1, 2024, the Company entered into the Purchase Agreement, pursuant to which the Company agreed to issue and sell, in the Offering, (i) 330,450 Shares of the Common Stock, (ii) 4,669,550 Pre-Funded Warrants exercisable for an aggregate of 4,669,550 shares of Common Stock, (iii) 5,000,000 Series B-1 Common Warrants exercisable for an aggregate of 5,000,000 shares of Common Stock, and (iv) 5,000,000 Series B-2 Common Warrants exercisable for an aggregate of 5,000,000 shares of Common Stock for net proceeds of $4,389, after deducting offering expenses of $1,110. The securities were offered in combinations of (a) one Share or one Pre-Funded Warrant, together with (b) one Series B-1 Common Warrant and one Series B-2 Common Warrant, for a combined purchase price of $1.10 (less $0.0001 for each Pre-Funded Warrant). Subject to certain ownership limitations, the Warrants were exercisable upon issuance. Each Pre-Funded Warrant is exercisable for one Share of Common Stock at a price per share of $0.0001 and does not expire. Each Series B-1 Common Warrant is exercisable into one Share of Common Stock at a price per share of $1.10 for a five-year period after February 6, 2024, the date of issuance. Each Series B-2 Common Warrant is exercisable into one share of Common Stock at a price per share of $1.10 for an 18-month period after February 6, 2024, the date of issuance. The Warrants were classified as equity and the allocated fair value of $4,279 is included in additional paid in capital. The Company determined that the amount paid for the Pre-Funded Warrants approximates their fair value. The Black-Scholes option-pricing model was used to estimate the fair value of the Series B-1 Common and Series B-2 Common Warrants with the following weighted-average assumptions: Volatility 156.3 % Expected term in years 1.63 Dividend rate 0.0 % Risk-free interest rate 4.65 % In connection with the issuance of the securities pursuant to the Purchase Agreement, the exercise price of the Series A-1 Warrants issued in connection with the Merger was reduced to par, or $0.0001, per share pursuant to the terms of the Series A-1 Warrants. As of March 31, 2024, the Company had the following warrants outstanding to purchase Common Stock. Number of Shares Exercise Price per Share Expiration Date 2,449,000 $0.0001 Do not expire 5,000,000 $1.10 August 2025 116,353 $85.96 December 2025 542 $2,100.00 February 2026 3,524 $197.05 May 2027 167 $0.01 July 2027 343 $429.73 April 2028 181,316 $0.0001 December 2028 5,000,000 $1.10 February 2029 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION 2015 Equity Incentive Plan GRI Operations adopted the GRI Operations Plan, that provided GRI Operations with the ability to grant stock options, restricted stock awards and other equity-based awards to employees, directors, and consultants. Upon completion of the Merger, the Company assumed the GRI Operations Plan and 12,781 outstanding and unexercised options issued thereunder, and ceased granting awards under the GRI Operations Plan. As of March 31, 2024, no options remain outstanding under the GRI Operations Plan. Amended and Restated 2018 Equity Incentive Plan On April 21, 2023, the stockholders of the Company approved 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). The A&R 2018 Plan had previously been approved by the Company’s board of directors, subject to stockholder approval. The A&R 2018 Plan became effective on April 21, 2023, with the stockholders approving the amendment to the A&R 2018 Plan to, among other things, (i) to increase the aggregate number of shares by 24,129 shares to 30,952 shares of the Company’s Common Stock for issuance as awards under the A&R 2018 Plan, (ii) to extend the term of the A&R 2018 Plan through January 1, 2033, (iii) to prohibit any action that would be treated as a “repricing” of an award without further approval by the stockholders of Company, and (iv) to revise the limits on awards to non-employee directors. The A&R 2018 Plan provides the Company with the ability to grant stock options, restricted stock and other equity-based awards to employees, directors and consultants. Stock options granted by the Company under the A&R 2018 Plan generally have a contractual life of up to 10 years. As of March 31, 2024, awards granted under the A&R 2018 Plan representing the right to purchase or contingent right to receive up to an aggregate of 32,642 shares of the Company's Common Stock were outstanding and 56,781 shares of the Company’s Common Stock were reserved for issuance under the A&R 2018 Plan. The number of shares reserved for issuance under the A&R 2018 Plan may be increased pursuant to the A&R 2018 Plan’s “evergreen” provision on the first day of each calendar year beginning January 1, 2024 and ending on and including January 1, 2033, by a number of shares not to exceed 4% of the aggregate number of shares of the Company’s Common Stock outstanding on the final day of the immediately preceding calendar year. The Company recorded stock-based compensation related to equity-based awards issued under the GRI Operations Plan and the A&R 2018 Plan in the following expense categories of its accompanying consolidated statements of operations for the three months ended March 31, 2024 and 2023: For the Three Months Ended March 31, 2024 2023 Research and development $ — $ — General and administrative 37 13 Total $ 37 $ 13 The Company measures equity-based awards granted to employees and non-employees based on their fair value on the date of the grant and recognizes compensation expense for those awards over the requisite service period or performance-based period, which is generally the vesting period of the respective award. The measurement date for service-based equity awards is the date of grant, and equity-based compensation costs are recognized as expense over the requisite service period.The Company records expense for performance-based awards if the Company concludes that it is probable that the performance condition will be achieved. The table below represents the activity of stock options granted to employees and non-employees for the three months ended March 31, 2024: Number of options Weighted average exercise price Weighted average remaining contractual term (years) Outstanding at December 31, 2023 32,642 $ 37.41 9.55 Granted — Exercised — Forfeited/cancelled — Outstanding at March 31, 2024 32,642 $ 37.41 9.30 Exercisable at March 31, 2024 5,958 $ 133.34 8.78 Vested and expected to vest at March 31, 2024 32,642 $ 37.41 9.30 As of March 31, 2024, all of the outstanding and exercisable stock options were out of the money and therefore had no intrinsic value. At March 31, 2024, the unrecognized compensation cost related to unvested stock options expected to vest was $350. This unrecognized compensation is expected to be recognized over a weighted-average amortization period of 2.72 years. No equity-based awards were granted during the three months ended March 31, 2024 and 2023. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Employment Agreements The Company has entered into employment contracts with its officers that provide for severance and continuation of benefits in the event of termination of employment by the Company without cause or by the employee for good reason. In addition, in the event of termination of employment following a change in control, the vesting of certain equity awards may be accelerated. Separation and Release Agreement |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Pay vs Performance Disclosure | ||
Net loss | $ (1,887) | $ (2,150) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Mar. 31, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
BASIS OF PRESENTATION AND SUM_2
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Basis of Accounting | The accompanying unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) for interim financial periods and pursuant to the rules of the Securities and Exchange Commission (the SEC). Any reference in the accompanying unaudited interim financial statements to “authoritative guidance” is meant to refer to GAAP as found in the Accounting Standards Codification (ASC) and Accounting Standards Updates (ASU) of the Financial Accounting Standards Board (FASB). The December 31, 2023 balance sheet was derived from the Company’s audited consolidated financial statements. |
Principles of Consolidation | Principles of Consolidation The unaudited interim consolidated financial statements include the accounts of GRI Bio, Inc. and its wholly-owned subsidiary, GRI Bio Operations, Inc. All intercompany balances and transactions have been eliminated. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Estimates and assumptions are primarily made in relation to the valuation of share options, warrant issuance and subsequent revaluations, valuation allowances relating to deferred tax assets, accrued expenses and estimation of the incremental borrowing rate for the operating lease. If actual results differ from the Company’s estimates, or to the extent these estimates are adjusted in future periods, the Company’s consolidated results of operations could either benefit from, or be adversely affected by, any such change in estimate. |
Fair Value Measurements | Fair Value Measurements Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820, Fair Value Measurement , (ASC 820) establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The three levels of fair value hierarchy defined by ASC 820 are described below: Level 1 : Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. Level 2 : Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 3 : Pricing inputs that are generally unobservable inputs and not corroborated by market data. As of March 31, 2024, the Company’s financial instruments included cash, cash equivalents, prepaid expenses and other current assets, accounts payable, accrued expenses and certain liability classified warrants. The carrying amounts reported in the balance sheets for cash, prepaid expenses and other current assets, accounts payable and accrued expenses approximate their fair value based on the short-term maturity of these instruments. The Company recognizes transfers between levels of the fair value hierarchy on the date of the event or change in circumstances that caused the transfer. At March 31, 2024, there were no financial assets or liabilities measured at fair value on a recurring basis other than the liability classified warrants. In May 2022, Vallon Pharmaceuticals, Inc. (Vallon) issued warrants in connection with a securities purchase agreement. Vallon evaluated the warrants in accordance with ASC 815-40, Derivatives and Hedging — Contracts in Entity’s Own Equity (ASC 815-40), and concluded that a provision in the warrants related to the reduction of the exercise price in certain circumstances precluded the warrants from being accounted for as components of equity. As a result, the warrants were recorded as a liability on the balance sheet. Vallon recorded the fair value of the warrants upon issuance using a Black-Scholes valuation model. The Company is required to revalue the warrants at each reporting date with any changes in fair value recorded in its statement of operations. The valuation of the warrants is considered under Level 3 of the fair value hierarchy due to the need to use assumptions in the valuation that are both significant to the fair value measurement and unobservable. The change in the fair value of the Level 3 warrants liabilities is reflected in the statement of operations for the three months ended March 31, 2024. |
Net Loss Per Common Share | Net Loss Per Common Share Basic and diluted net loss per common share is computed based on the weighted average number of shares of common stock outstanding during each year. Diluted net loss per common share is computed based on the weighted average number of shares of common stock outstanding during each year, plus the dilutive effect of options considered to be outstanding during each year, in accordance with ASC 260, Earnings Per Share . As the Company had a net loss in each of the three months ended March 31, 2024 and 2023, diluted net loss per common share is the same as basic net loss per common share for the period because the effects of potentially dilutive securities are antidilutive. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements The Company considered the applicability and impact of all ASUs issued during the quarter ended March 31, 2024 and each was determined to be either not applicable or expected to have minimal impact on these consolidated financial statements. |
BASIS OF PRESENTATION AND SUM_3
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Schedule of Common Stock Equivalents Excluded from Diluted Net Loss Per Share Calculation | Common stock equivalents excluded from the diluted net loss per common share calculations are as follows: March 31, 2024 2023 Stock options 32,642 12,781 Warrants 10,298,553 14,822 Restricted stock with repurchase rights — 23,433 10,331,195 51,036 |
MERGER WITH VALLON (Tables)
MERGER WITH VALLON (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of the Net Liabilities Assumed in the Merger | The following table shows the net liabilities assumed in the Merger: April 21, 2023 Cash and cash equivalents $ 941 Prepaid and other assets 310 Accounts payable and accrued expenses (4,190) Total net liabilities assumed (2,939) Plus: Transaction costs (2,984) Total net liabilities assumed plus transaction costs $ (5,923) |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Liabilities Measured on Recurring Basis | The following table presents, for each of the fair value hierarchy levels required under ASC 820, the Company’s liabilities that are measured at fair value on a recurring basis at March 31, 2024: Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Other Unobservable Inputs (Level 3) Liabilities: Warrant liability $ — $ — $ 1 Total liabilities $ — $ — $ 1 |
Schedule of Activity for the Liability Measured at Estimated Fair Value Using Unobservable Inputs | The following table presents the changes in the fair value of the Level 3 liability: Warrant Liability Fair value as of December 31, 2023 $ 3 Change in valuation (2) Fair value as of March 31, 2024 $ 1 |
Schedule of Fair Value Measurement Inputs and Valuation Techniques | The Black-Scholes valuation model was used to estimate the fair value of the warrants with the following weighted-average assumptions: March 31, 2024 December 31, 2023 Volatility 211.9 % 171.0 % Expected term in years 2.5 2.5 Dividend rate 0.0 % 0.0 % Risk-free interest rate 4.50 % 4.12 % Volatility 156.3 % Expected term in years 1.63 Dividend rate 0.0 % Risk-free interest rate 4.65 % |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | March 31, 2024 December 31, 2023 Computer equipment $ 21 $ 21 Furniture and fixtures 13 13 34 34 Accumulated depreciation (27) (26) $ 7 $ 8 |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses consist of the following: March 31, 2024 December 31, 2023 Research and development $ 191 $ 93 General and administrative 52 441 Payroll and related 756 736 Total accrued expenses $ 999 $ 1,270 |
STOCKHOLDERS_ EQUITY (Tables)
STOCKHOLDERS’ EQUITY (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Equity [Abstract] | |
Schedule of Fair Value Measurement Inputs and Valuation Techniques | The Black-Scholes valuation model was used to estimate the fair value of the warrants with the following weighted-average assumptions: March 31, 2024 December 31, 2023 Volatility 211.9 % 171.0 % Expected term in years 2.5 2.5 Dividend rate 0.0 % 0.0 % Risk-free interest rate 4.50 % 4.12 % Volatility 156.3 % Expected term in years 1.63 Dividend rate 0.0 % Risk-free interest rate 4.65 % |
Schedule of Warrants Outstanding to Purchase Common Stock | As of March 31, 2024, the Company had the following warrants outstanding to purchase Common Stock. Number of Shares Exercise Price per Share Expiration Date 2,449,000 $0.0001 Do not expire 5,000,000 $1.10 August 2025 116,353 $85.96 December 2025 542 $2,100.00 February 2026 3,524 $197.05 May 2027 167 $0.01 July 2027 343 $429.73 April 2028 181,316 $0.0001 December 2028 5,000,000 $1.10 February 2029 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Stock-based Compensation Expense | The Company recorded stock-based compensation related to equity-based awards issued under the GRI Operations Plan and the A&R 2018 Plan in the following expense categories of its accompanying consolidated statements of operations for the three months ended March 31, 2024 and 2023: For the Three Months Ended March 31, 2024 2023 Research and development $ — $ — General and administrative 37 13 Total $ 37 $ 13 |
Schedule of Activity of Stock Options | The table below represents the activity of stock options granted to employees and non-employees for the three months ended March 31, 2024: Number of options Weighted average exercise price Weighted average remaining contractual term (years) Outstanding at December 31, 2023 32,642 $ 37.41 9.55 Granted — Exercised — Forfeited/cancelled — Outstanding at March 31, 2024 32,642 $ 37.41 9.30 Exercisable at March 31, 2024 5,958 $ 133.34 8.78 Vested and expected to vest at March 31, 2024 32,642 $ 37.41 9.30 |
ORGANIZATION AND DESCRIPTION _2
ORGANIZATION AND DESCRIPTION OF BUSINESS (Details) | Jan. 29, 2024 | Apr. 21, 2023 $ / shares | Mar. 31, 2024 $ / shares | Dec. 31, 2023 $ / shares |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Common stock, par value (in usd per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | |
Reverse stock split | 0.14290 | 0.0333 |
LIQUIDITY (Details)
LIQUIDITY (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||||
Feb. 01, 2024 | Apr. 21, 2023 | Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Related Party Transaction [Line Items] | |||||
Accumulated deficit | $ (33,420) | $ (31,533) | |||
Cash and cash equivalents | $ 4,091 | $ 1,808 | |||
Common stock, shares issued (in shares) | 3,196,488 | 645,738 | |||
Common stock placed into escrow (in shares) | 3,878,411 | ||||
Proceeds from issuance of common stock in pre-closing financing | $ 11,704 | $ 5,500 | $ 0 | ||
Offering expenses | $ 546 | ||||
Pre-Funded Warrants | |||||
Related Party Transaction [Line Items] | |||||
Warrant exercise price (in usd per share) | $ 0.0001 | ||||
Number of shares called by each warrant | 1 | ||||
Series B-1 Common Warrants | |||||
Related Party Transaction [Line Items] | |||||
Warrant exercise price (in usd per share) | $ 1.10 | ||||
Warrants and rights outstanding, term | 5 years | ||||
Number of shares called by each warrant | 1 | ||||
Series B-2 Common Warrants | |||||
Related Party Transaction [Line Items] | |||||
Warrant exercise price (in usd per share) | $ 1.10 | ||||
Warrants and rights outstanding, term | 18 months | ||||
Number of shares called by each warrant | 1 | ||||
Series A-1 Warrants | |||||
Related Party Transaction [Line Items] | |||||
Warrant exercise price (in usd per share) | $ 0.0001 | ||||
Series T Warrants | Weighted Average | |||||
Related Party Transaction [Line Items] | |||||
Stock price (in usd per share) | $ 64.47 | ||||
Public Offering | |||||
Related Party Transaction [Line Items] | |||||
Offering expenses | $ 1,110 | ||||
Sale of stock (in shares) | 330,450 | ||||
Net proceeds from sale of stock | $ 4,389 | ||||
Number of securities issued (in shares) | 1 | ||||
Sale of stock, price per share (in usd per share) | $ 1.10 | ||||
Public Offering | Pre-Funded Warrants | |||||
Related Party Transaction [Line Items] | |||||
Number of shares that became exercisable (in shares) | 4,669,550 | ||||
Number of shares called by warrants (in shares) | 4,669,550 | ||||
Number of securities issued (in shares) | 1 | ||||
Public Offering | Series B-1 Common Warrants | |||||
Related Party Transaction [Line Items] | |||||
Number of shares that became exercisable (in shares) | 5,000,000 | ||||
Number of shares called by warrants (in shares) | 5,000,000 | ||||
Number of securities issued (in shares) | 1 | ||||
Public Offering | Series B-2 Common Warrants | |||||
Related Party Transaction [Line Items] | |||||
Number of shares that became exercisable (in shares) | 5,000,000 | ||||
Number of shares called by warrants (in shares) | 5,000,000 | ||||
Number of securities issued (in shares) | 1 | ||||
Common Stock | |||||
Related Party Transaction [Line Items] | |||||
Conversion of stock (in shares) | 36,263 | ||||
Additional shares converted into common stock (in shares) | 145,052 | ||||
Investor | |||||
Related Party Transaction [Line Items] | |||||
Investment in cash | $ 12,250 | $ 12,250 | |||
Common stock, shares issued (in shares) | 969,602 | ||||
Proceeds from issuance of common stock in pre-closing financing | 11,704 | ||||
Offering expenses | $ 546 |
BASIS OF PRESENTATION AND SUM_4
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - shares | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 10,331,195 | 51,036 |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 32,642 | 12,781 |
Warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 10,298,553 | 14,822 |
Restricted stock with repurchase rights | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 0 | 23,433 |
MERGER WITH VALLON - Narrative
MERGER WITH VALLON - Narrative (Details) | Apr. 21, 2023 $ / shares shares | Mar. 31, 2024 shares | Dec. 31, 2023 shares | Apr. 22, 2023 shares | Apr. 20, 2023 |
Business Acquisition [Line Items] | |||||
Ownership percentage in common stock (as a percent) | 15% | ||||
Common stock, shares outstanding (in shares) | 3,196,488 | 645,738 | 422,333 | ||
Issuance of common stock for reverse recapitalization expenses (in shares) | 4,363 | ||||
GRI Operations | |||||
Business Acquisition [Line Items] | |||||
Common stock, exchange ratio | 0.0374 | ||||
Ownership percentage in common stock (as a percent) | 85% | ||||
Exchange Warrants | |||||
Business Acquisition [Line Items] | |||||
Number of shares called by warrants (in shares) | 60,227 | ||||
Warrant exercise price (in usd per share) | $ / shares | $ 103.11 |
MERGER WITH VALLON - Schedule o
MERGER WITH VALLON - Schedule of the Net Liabilities Assumed in the Merger (Details) $ in Thousands | Apr. 21, 2023 USD ($) |
Business Combination and Asset Acquisition [Abstract] | |
Cash and cash equivalents | $ 941 |
Prepaid and other assets | 310 |
Accounts payable and accrued expenses | (4,190) |
Total net liabilities assumed | (2,939) |
Plus: Transaction costs | (2,984) |
Total net liabilities assumed plus transaction costs | $ (5,923) |
FAIR VALUE MEASUREMENTS - Sched
FAIR VALUE MEASUREMENTS - Schedule of Fair Value, Liabilities Measured on Recurring Basis (Details) $ in Thousands | Mar. 31, 2024 USD ($) |
Quoted Prices in Active Markets (Level 1) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Warrant liability | $ 0 |
Total liabilities | 0 |
Significant Other Observable Inputs (Level 2) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Warrant liability | 0 |
Total liabilities | 0 |
Significant Other Unobservable Inputs (Level 3) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Warrant liability | 1 |
Total liabilities | $ 1 |
FAIR VALUE MEASUREMENTS - Sch_2
FAIR VALUE MEASUREMENTS - Schedule of Liability Measured at Estimated Fair Value (Details) - Warrant Liability $ in Thousands | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Fair value as of December 31, 2023 | $ 3 |
Change in valuation | (2) |
Fair value as of March 31, 2024 | $ 1 |
FAIR VALUE MEASUREMENTS - Sch_3
FAIR VALUE MEASUREMENTS - Schedule of Derivative Liability Measurement Inputs (Details) - Weighted Average | Mar. 31, 2024 | Dec. 31, 2023 |
Volatility | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants outstanding, measurement input | 2.119 | 1.710 |
Expected term in years | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants outstanding, measurement input | 2.5 | 2.5 |
Dividend rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants outstanding, measurement input | 0 | 0 |
Risk-free interest rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants outstanding, measurement input | 0.0450 | 0.0412 |
PROPERTY AND EQUIPMENT - Schedu
PROPERTY AND EQUIPMENT - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 34 | $ 34 |
Accumulated depreciation | (27) | (26) |
Property and equipment, net | 7 | 8 |
Computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 21 | 21 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 13 | $ 13 |
PROPERTY AND EQUIPMENT - Narrat
PROPERTY AND EQUIPMENT - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 1 | $ 1 |
ACCRUED EXPENSES (Details)
ACCRUED EXPENSES (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Payables and Accruals [Abstract] | ||
Research and development | $ 191 | $ 93 |
General and administrative | 52 | 441 |
Payroll and related | 756 | 736 |
Total accrued expenses | $ 999 | $ 1,270 |
PROMISSORY NOTES (Details)
PROMISSORY NOTES (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | |||||
Apr. 21, 2023 USD ($) $ / shares shares | Mar. 09, 2023 USD ($) $ / shares shares | Dec. 14, 2022 USD ($) | Dec. 13, 2022 USD ($) closing | Mar. 31, 2024 USD ($) | Mar. 31, 2023 USD ($) | |
Debt Instrument [Line Items] | ||||||
Proceeds from issuance of notes | $ 0 | $ 1,250 | ||||
Amortization of debt discounts and issuance costs | 0 | 1,161 | ||||
Exchange Warrants | ||||||
Debt Instrument [Line Items] | ||||||
Number of shares called by warrants (in shares) | shares | 60,227 | |||||
Warrant exercise price (in usd per share) | $ / shares | $ 103.11 | |||||
Bridge SPA | ||||||
Debt Instrument [Line Items] | ||||||
Debt issuance costs | 295 | $ 90 | ||||
Investor | ||||||
Debt Instrument [Line Items] | ||||||
Investment in cash | $ 12,250 | $ 12,250 | ||||
Investor | Bridge Warrants | ||||||
Debt Instrument [Line Items] | ||||||
Number of shares called by warrants (in shares) | shares | 178,927 | |||||
Warrant exercise price (in usd per share) | $ / shares | $ 9.31 | |||||
Warrants and rights outstanding, term | 60 months | |||||
Proceeds from issuance of notes | $ 532 | $ 571 | ||||
Investor | Exchange Warrants | ||||||
Debt Instrument [Line Items] | ||||||
Warrant exercise price (in usd per share) | $ / shares | $ 103.11 | |||||
Investor | Bridge SPA | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, face amount | 1,667 | 1,667 | $ 3,333 | |||
Aggregate purchase price | 1,250 | 1,250 | $ 2,500 | |||
Number of closings | closing | 2 | |||||
Proceeds from issuance of notes | $ 718 | $ 679 |
STOCKHOLDERS_ EQUITY - Narrativ
STOCKHOLDERS’ EQUITY - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |||
Feb. 01, 2024 | Apr. 21, 2023 | Mar. 31, 2024 | Mar. 31, 2023 | |
Class of Stock [Line Items] | ||||
Proceeds from issuance of common stock in pre-closing financing | $ 11,704 | $ 5,500 | $ 0 | |
Offering expenses | $ 546 | |||
Pre-Funded Warrants | ||||
Class of Stock [Line Items] | ||||
Warrant exercise price (in usd per share) | $ 0.0001 | |||
Number of shares called by each warrant | 1 | |||
Series B-1 Common Warrants | ||||
Class of Stock [Line Items] | ||||
Warrant exercise price (in usd per share) | $ 1.10 | |||
Number of shares called by each warrant | 1 | |||
Warrants and rights outstanding, term | 5 years | |||
Series B-2 Common Warrants | ||||
Class of Stock [Line Items] | ||||
Warrant exercise price (in usd per share) | $ 1.10 | |||
Number of shares called by each warrant | 1 | |||
Warrants and rights outstanding, term | 18 months | |||
Series A-1 Warrants | ||||
Class of Stock [Line Items] | ||||
Warrant exercise price (in usd per share) | $ 0.0001 | |||
Public Offering | ||||
Class of Stock [Line Items] | ||||
Offering expenses | $ 1,110 | |||
Sale of stock (in shares) | 330,450 | |||
Net proceeds from sale of stock | $ 4,389 | |||
Number of securities issued (in shares) | 1 | |||
Sale of stock, price per share (in usd per share) | $ 1.10 | |||
Public Offering | Pre-Funded Warrants | ||||
Class of Stock [Line Items] | ||||
Number of Shares (in shares) | 4,669,550 | |||
Number of shares called by warrants (in shares) | 4,669,550 | |||
Number of securities issued (in shares) | 1 | |||
Public Offering | Series B-1 Common Warrants | ||||
Class of Stock [Line Items] | ||||
Number of Shares (in shares) | 5,000,000 | |||
Number of shares called by warrants (in shares) | 5,000,000 | |||
Number of securities issued (in shares) | 1 | |||
Public Offering | Series B-2 Common Warrants | ||||
Class of Stock [Line Items] | ||||
Number of Shares (in shares) | 5,000,000 | |||
Number of shares called by warrants (in shares) | 5,000,000 | |||
Number of securities issued (in shares) | 1 | |||
Common Stock | ||||
Class of Stock [Line Items] | ||||
Conversion of stock (in shares) | 36,263 | |||
Additional shares converted into common stock (in shares) | 145,052 | |||
Additional Paid-in Capital | ||||
Class of Stock [Line Items] | ||||
Warrants, equity impact | $ 4,279 | |||
Investor | ||||
Class of Stock [Line Items] | ||||
Investment in cash | $ 12,250 | 12,250 | ||
Proceeds from issuance of common stock in pre-closing financing | 11,704 | |||
Offering expenses | $ 546 |
STOCKHOLDERS_ EQUITY - Schedule
STOCKHOLDERS’ EQUITY - Schedule of Estimate of the Fair Value of the Warrants and Assumptions (Details) - Weighted Average | Mar. 31, 2024 | Dec. 31, 2023 |
Volatility | ||
Class of Stock [Line Items] | ||
Warrants outstanding, measurement input | 2.119 | 1.710 |
Expected term in years | ||
Class of Stock [Line Items] | ||
Warrants outstanding, measurement input | 2.5 | 2.5 |
Dividend rate | ||
Class of Stock [Line Items] | ||
Warrants outstanding, measurement input | 0 | 0 |
Risk-free interest rate | ||
Class of Stock [Line Items] | ||
Warrants outstanding, measurement input | 0.0450 | 0.0412 |
Series B-1 Common And Series B-2 Common Warrants Member | Volatility | ||
Class of Stock [Line Items] | ||
Warrants outstanding, measurement input | 1.563 | |
Series B-1 Common And Series B-2 Common Warrants Member | Expected term in years | ||
Class of Stock [Line Items] | ||
Warrants outstanding, measurement input | 1.63 | |
Series B-1 Common And Series B-2 Common Warrants Member | Dividend rate | ||
Class of Stock [Line Items] | ||
Warrants outstanding, measurement input | 0 | |
Series B-1 Common And Series B-2 Common Warrants Member | Risk-free interest rate | ||
Class of Stock [Line Items] | ||
Warrants outstanding, measurement input | 0.0465 |
STOCKHOLDERS_ EQUITY - Schedu_2
STOCKHOLDERS’ EQUITY - Schedule of Warrants Outstanding to Purchase Common Stock (Details) | Mar. 31, 2024 $ / shares shares |
Warrants Not Expiring | |
Class of Stock [Line Items] | |
Number of Shares (in shares) | shares | 2,449,000 |
Exercise Price per Share (in usd per share) | $ / shares | $ 0.0001 |
Warrants Expiring In August 2025 | |
Class of Stock [Line Items] | |
Number of Shares (in shares) | shares | 5,000,000 |
Exercise Price per Share (in usd per share) | $ / shares | $ 1.10 |
Warrants Expiring In December 2025 | |
Class of Stock [Line Items] | |
Number of Shares (in shares) | shares | 116,353 |
Exercise Price per Share (in usd per share) | $ / shares | $ 85.96 |
Warrants Expiring In Febuary 2026 | |
Class of Stock [Line Items] | |
Number of Shares (in shares) | shares | 542 |
Exercise Price per Share (in usd per share) | $ / shares | $ 2,100 |
Warrants Expiring In May 2027 | |
Class of Stock [Line Items] | |
Number of Shares (in shares) | shares | 3,524 |
Exercise Price per Share (in usd per share) | $ / shares | $ 197.05 |
Warrants Expiring In July 2027 | |
Class of Stock [Line Items] | |
Number of Shares (in shares) | shares | 167 |
Exercise Price per Share (in usd per share) | $ / shares | $ 0.01 |
Warrants Expiring In April 2028 | |
Class of Stock [Line Items] | |
Number of Shares (in shares) | shares | 343 |
Exercise Price per Share (in usd per share) | $ / shares | $ 429.73 |
Warrants Expiring In December 2028 | |
Class of Stock [Line Items] | |
Number of Shares (in shares) | shares | 181,316 |
Exercise Price per Share (in usd per share) | $ / shares | $ 0.0001 |
Warrants Expiring In Febuary 2029 | |
Class of Stock [Line Items] | |
Number of Shares (in shares) | shares | 5,000,000 |
Exercise Price per Share (in usd per share) | $ / shares | $ 1.10 |
STOCK-BASED COMPENSATION - Narr
STOCK-BASED COMPENSATION - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Apr. 21, 2023 | Mar. 31, 2024 | Dec. 31, 2023 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Number of shares outstanding | 32,642 | 32,642 | |
Outstanding, intrinsic value | $ 0 | ||
Unrecognized compensation cost | $ 350 | ||
Stock options | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Unrecognized compensation, weighted average amortization period (in years) | 2 years 8 months 19 days | ||
2015 Plan | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Number of shares outstanding | 12,781 | ||
A&R 2018 Plan | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Number of additional shares authorized | 24,129 | ||
Number of shares authorized | 30,952 | 32,642 | |
Common shares reserved for future awards (in shares) | 56,781 | ||
Maximum increase in shares reserved for issuance as a percentage of aggregate common stock outstanding | 4% | ||
A&R 2018 Plan | Stock options | Maximum | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Stock awards, contractual life (in years) | 10 years |
STOCK-BASED COMPENSATION - Sche
STOCK-BASED COMPENSATION - Schedule of Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation | $ 37 | $ 13 |
Research and development | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation | 0 | 0 |
General and administrative | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation | $ 37 | $ 13 |
STOCK-BASED COMPENSATION - Acti
STOCK-BASED COMPENSATION - Activity of Stock Options (Details) - $ / shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Number of options | ||
Outstanding, Beginning Balance (in shares) | 32,642 | |
Granted (in shares) | 0 | |
Exercised (in shares) | 0 | |
Forfeited (in shares) | 0 | |
Outstanding, Ending Balance (in shares) | 32,642 | 32,642 |
Exercisable, Ending Balance (in shares) | 5,958 | |
Vested and expected to vest (in shares) | 32,642 | |
Weighted average exercise price | ||
Outstanding, Beginning Balance (in usd per share) | $ 37.41 | |
Outstanding, Ending Balance (in usd per share) | 37.41 | $ 37.41 |
Exercisable, Ending Balance (in usd per share) | 133.34 | |
Vested and expected to vest (in usd per share) | $ 37.41 | |
Weighted average remaining contractual term (years) | ||
Outstanding (years) | 9 years 3 months 18 days | 9 years 6 months 18 days |
Exercisable (years) | 8 years 9 months 10 days | |
Vested and expected to vest (years) | 9 years 3 months 18 days |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - Former Chief Executive Officer | Apr. 21, 2023 |
Loss Contingencies [Line Items] | |
COBRA benefits, payment period (in months) | 18 months |
Percentage of target bonus (as a percent) | 150% |