GRI Bio prices $5.0 million public offering at $3.60 with three warrant series

The pricing

GRI Bio, Inc. (Nasdaq: GRI) priced a public offering on April 1, 2025 of 1,388,888 shares of common stock, or common stock equivalents, with three series of warrants. The combined price is $3.60 per share, or $3.5999 per pre-funded warrant, and the prospectus puts gross proceeds at $4,999,878.

The deal is 202,000 shares of common stock and 1,186,888 pre-funded warrants. A pre-funded warrant is paid for almost in full at purchase and can be exercised for $0.0001 per share. Each share or pre-funded warrant comes with one Series E-1, one Series E-2 and one Series E-3 warrant.

The warrants

All three series carry an exercise price of $3.20 per share, which equals the official closing price on The Nasdaq Capital Market on March 31, 2025, and all are exercisable immediately. The E-1 warrants expire after five years, the E-2 warrants after 18 months and the E-3 warrants after nine months. The company says full cash exercise would bring in approximately $13.3 million more, with no assurance that any will be exercised.

Dilution is large against the share base. The prospectus says 525,358 shares were outstanding as of February 28, 2025, and 1,914,246 would be after the offering, if the pre-funded warrants were fully exercised and no other warrants were. The share numbers reflect a one-for-17 reverse stock split effected on February 21, 2025.

The placement agent and fees

H.C. Wainwright & Co., LLC is the exclusive placement agent, on a reasonable best efforts basis. It is not buying any of the securities. GRI Bio agreed to pay it a cash fee of 7.0% of gross proceeds, or $349,991, plus a management fee of 1.0% of gross proceeds, $25,000 of non-accountable expenses, legal and other expenses of up to $100,000 and clearing expenses of up to $15,950. Proceeds before expenses are $4,649,887. It estimates net proceeds of approximately $4.2 million, assuming full exercise of the pre-funded warrants.

The placement agent also receives warrants for 97,222 shares, equal to 7.0% of the shares and pre-funded warrants offered, at $4.50 per share, which is 125% of the combined offering price. The release and the prospectus cover do not name counsel for either side.

There is no minimum amount required to close, and no escrow account holds investor funds. Closing was expected on or about April 2, 2025, under a Form S-1 (File No. 333-286072) that the SEC declared effective on April 1, 2025.

Cash, losses and listing

The net loss was $8.2 million in 2024 and $13.0 million in 2023, and the accumulated deficit was $39.7 million at December 31, 2024. The prospectus says the company's auditors have expressed substantial doubt about its ability to continue as a going concern. Without the offering, the company says its cash is enough into the second quarter of 2025. With the net proceeds, it says its capital needs are met through the third quarter of 2025. The money is for product candidate development, working capital and general corporate purposes.

Nasdaq flagged a minimum bid price deficiency on September 10, 2024 and confirmed compliance on March 10, 2025.

The science behind the raise

GRI Bio develops Natural Killer T cell modulators. Its lead program, GRI-0621, is an oral formulation of tazarotene, a retinoid that is approved in the United States as a topical treatment for psoriasis and acne. The company says it has been evaluated in over 1,700 patients as an oral product for up to 52 weeks. The target is idiopathic pulmonary fibrosis, which the prospectus says affects approximately 140,000 people in the United States, where two therapies are already approved.

The FDA has cleared the application for GRI-0621 in the disease. The company is running a randomized, double-blind, multi-center Phase 2a biomarker study that began enrolling in December 2023. Topline results are expected in the third quarter of 2025. The prospectus reports no efficacy result for the drug in this disease.

The company's cash outlook ends in the third quarter of 2025, the same quarter it expects the Phase 2a data.

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