GRI Bio (GRI) risk factors, FY2024 10-K

Risks Related to Our Financial Position and Need for Additional Capital

1. 01We have incurred significant net losses since inception and we expect to continue to incur significant net losses for the foreseeable future. We have never been, and may never be, profitable
2. 02We will require substantial additional capital to finance our operations. If we are unable to raise such capital when needed, or on acceptable terms, we may be forced to delay, reduce and/or eliminate one or more of our research and drug development programs, future commercialization efforts or other operations
3. 03Our auditors have expressed substantial doubt about our ability to continue as a going concern, and we may not be able to continue as a going concern if we do not obtain additional financing

Risks Related to Research and Development and the Pharmaceutical Industry

1. 04Clinical development involves a lengthy, complex, and expensive process, with an uncertain outcome. In addition, the results of preclinical studies and early-stage clinical trials of our product candidates may not be predictive of the results of later-stage clinical trials
2. 05If we encounter additional difficulties enrolling patients in our clinical trials, our clinical development activities could be delayed or otherwise adversely affected
3. 06Interim, topline and preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data
4. 07If product liability lawsuits are brought against us, we may incur substantial financial or other liabilities and may be required to limit commercialization of our product candidates

Risks Related to Regulatory Approval of Our Product Candidates

1. 08We may seek Fast Track designation for one or more of our product candidates, but we might not receive such designation, and even if we do, such designation may not actually lead to a faster development or regulatory review or approval process
2. 09States and requirements of comparable foreign regulatory authorities. In addition, we will be subject to continued compliance with cGMPs and GCPs for any clinical trials that we conduct post-approval
3. 10In addition, adverse side effects caused by any drugs that contain the same active ingredients as or may otherwise be similar in nature to our product candidates could delay or prevent marketing approval of our product candidates or limit the commercial profile of an approved label for our product candidates

Risks Related to Commercialization of our Product Candidates

1. 11Even if a product candidate we develop receives marketing approval, it may fail to achieve the degree of market acceptance by physicians, patients, third-party payors and others in the medical community necessary for commercial success
2. 12Failure to obtain or maintain adequate reimbursement or insurance coverage for our approved product candidates, if any, could limit our ability to market those product candidates and decrease our ability to generate revenue
3. 13available, or are available only in limited amounts, we may have to subsidize or provide products for free or we may not be able to successfully commercialize our products
4. 14Even if we obtain FDA approval of any of our product candidates, we may never obtain approval or commercialize these product candidates outside of the United States, which could limit our ability to realize their full market potential
5. 15arrangements with one or more third parties, we may not be able to generate any future product revenue and we would incur significant additional losses
6. 16Ongoing healthcare legislative and regulatory reform measures may have a material adverse effect on our business and results of operations
7. 17among other things, contains multiple provisions that may impact the prices of drug products that are both sold into the Medicare program and throughout the United States
8. 18If we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could have a material adverse effect on our business, financial condition or results of operations

Risks Related to Our Intellectual Property

1. 19Our success depends in part on our ability to protect our intellectual property. It is difficult and costly to protect our proprietary rights and technology, and we may not be able to ensure their protection
2. 20We cannot be certain that we were the first to file any patent application related to our technology, including our product candidates, and, if we were not, we may be precluded from obtaining patent protection for our technology, including our product candidates
3. 21We may enter into license or other collaboration agreements in the future that may impose certain obligations on us. If we fail to comply with our obligations under such future agreements with third parties, we could lose license rights that may be important to our future business
4. 22Third-party claims of intellectual property infringement may be costly and time consuming to defend, and could prevent or delay our product discovery, development and commercialization efforts
5. 23Third parties may assert that we are employing their proprietary technology without authorization
6. 24Third parties may assert that our employees or consultants have wrongfully used or disclosed confidential information or misappropriated trade secrets
7. 25Others may claim an ownership interest in our intellectual property, which could expose us to litigation and have a significant adverse effect on our prospects
8. 26Because our programs may involve additional product candidates that may require the use of proprietary rights held by third parties, the growth of our business may depend in part on our ability to acquire, in-license or use these proprietary rights
9. 27We may be involved in lawsuits to protect or enforce our patents or the patents of our licensors, or challenging the patent rights of others, which could be expensive, time-consuming and unsuccessful
10. 28patent applications at risk of not issuing. Defense of these claims, regardless of their merit, would involve substantial litigation expense and would be a substantial diversion of employee resources from our business
11. 29Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements
12. 30Any patents covering our product candidates could be found invalid or unenforceable if challenged in court or the USPTO (or foreign patent offices)
13. 31Changes in patent law in the United States and in foreign jurisdictions could diminish the value of patents in general, thereby impairing our ability to protect our products
14. 32We have limited foreign intellectual property rights and may not be able to protect and enforce our intellectual property rights throughout the world
15. 33If we do not obtain patent term extension and data exclusivity or similar non-U.S. legislation extending the term of protection covering any product candidates we may develop, our business may be materially harmed

Risks Related to Our Reliance on Third Parties

1. 34Our employees, independent contractors, principal investigators, CROs, consultants or vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements
2. 35Because we rely on third-party manufacturing and supply vendors, our supply of research and development, preclinical and clinical development materials may become limited or interrupted or may not be of satisfactory quantity or quality

Risks Related to Managing Our Business and Operations

1. 36If we lose key management personnel, or if we fail to recruit additional highly skilled personnel, our ability to develop current product candidates or identify and develop new product candidates will be impaired, could result in loss of markets or market share and could make us less competitive
2. 37If we fail to attract and retain management and other key personnel, we may be unable to successfully develop or commercialize our product candidates or otherwise implement our business plan
3. 38In the ordinary course of our business, we, and the third parties upon which we rely, process sensitive or proprietary information and as a result, we and the third parties upon which we rely face a variety of evolving threats which could cause material cybersecurity incidents
4. 39Additionally, remote work has become more common and has increased risks to our information technology systems and data, as our employees utilize network connections, computers and devices outside our premises or network, including working at home, while in transit and in public locations
5. 40and damage to our reputation and a loss of confidence in us and our ability to conduct clinical trials, which could delay the clinical development of our product candidates
6. 41Our business could be adversely affected by the effects of health pandemics or epidemics in regions where it or third parties on which it relies have significant manufacturing facilities, concentrations of clinical trial sites, or other business operations
7. 42We maintain insurance that we believe is adequate for businesses of our size and type. However, there are types of losses that we believe are not economically reasonable to insure or that cannot be insured against

Risks Related to Our Common Stock, Financing and Capital Requirements

1. 43We expect the stock price of our Common Stock to be highly volatile
2. 44Moreover, the stock markets in general have experienced substantial volatility in the biotechnology industry that has often been unrelated to the operating performance of individual companies or a certain industry segment. These broad market fluctuations may also adversely affect the trading price of our Common Stock
3. 45Future sales and issuances of our securities could result in additional dilution of the percentage ownership of our stockholders and could cause our share price to fall
4. 46Our current expectation is that we will retain our future earnings to fund the development and growth of our business. As a result, capital appreciation, if any, of the shares of our Common Stock will be our stockholders’ sole source of gain, if any, for the foreseeable future
5. 47As a public company, we incur significant legal, accounting and other expenses under the Exchange Act, the Sarbanes-Oxley Act of 2002, as amended (SOX) and other applicable securities rules and regulations. In addition, we are subject to the rules of Nasdaq and The Nasdaq Capital Market
6. 48We currently take advantage of reduced disclosure and governance requirements applicable to smaller reporting companies, which could result in our Common Stock being less attractive to investors
7. 49We also take advantage of reduced disclosure and governance requirements applicable to emerging growth companies, which could result in our Common Stock being less attractive to investors
8. 50A delisting of our Common Stock from Nasdaq could adversely affect our ability to raise additional capital through the public or private sale of equity securities and our investors’ ability to dispose of, or obtain accurate quotations as to the market value of, our Common Stock
9. 51On September 10, 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 30 consecutive business days prior thereto
10. 52The February 2025 Reverse Stock Split may have caused our stock price to decline relative to its value before the split and likely has reduced the liquidity of shares of our Common Stock
11. 53Following a reverse stock split, the resulting market price of our Common Stock may not attract new investors, including institutional investors, and may not satisfy the investing requirements of those investors. Consequently, the trading liquidity of our Common Stock may not improve
12. 54Changes in tax law could adversely affect our business
13. 55If equity research analysts do not publish research or reports, continue to publish reports or publish unfavorable research or reports, about us, our business, or our market, our stock price and trading volume could decline
14. 56We may become a defendant in one or more stockholder derivative or class-action litigations, and any such future lawsuit may adversely affect our business, financial condition, results of operations and cash flows
15. 57Our amended and restated certificate of incorporation documents and Delaware law may inhibit a takeover that stockholders consider favorable