GRI Bio Announces Reverse Stock Split

Rhea-AI Summary

GRI Bio (NASDAQ: GRI) has announced a 1-for-17 reverse stock split, effective February 21, 2025, at 4:01 p.m. Eastern Time. The company's common stock will begin trading on a split-adjusted basis on February 24, 2025, under the same ticker symbol 'GRI' but with a new CUSIP number.

The reverse split aims to increase the per share trading price to regain compliance with Nasdaq's minimum bid price requirement. The split will reduce outstanding shares from approximately 8,933,366 to 525,492. Proportional adjustments will be made to exercise and conversion prices of outstanding stock options, warrants, and convertible securities.

No fractional shares will be issued; stockholders will receive cash payments for fractional shares. Stockholders with electronic book-entry shares require no action, while those holding physical certificates will receive instructions from Broadridge Corporate Issuers Solutions for exchanging certificates.

Positive

• Potential compliance with Nasdaq listing requirements through share price increase

Negative

• Reverse stock split indicates share price weakness
• No fundamental business value change despite share consolidation
• Reduction in total shares could impact stock liquidity

Insights

Financial Markets Analyst

The announced 1-for-17 reverse stock split represents a critical juncture for GRI Bio, primarily driven by the necessity to maintain its Nasdaq listing. While mathematically neutral in terms of market capitalization, reverse splits often carry significant implications that warrant careful analysis.

The reduction from 8.93 million to approximately 525,492 shares could potentially impact trading dynamics and liquidity. Historical data suggests that biotech companies implementing reverse splits often face increased volatility and scrutiny from the market. The maintenance of Nasdaq listing is important for:

• Access to institutional investors who may have mandate restrictions on OTC stocks
• Enhanced ability to raise future capital through secondary offerings
• Maintaining market visibility and research coverage

The timing of this move, combined with the company's focus on NKT cell modulators, suggests a strategic effort to strengthen its market position while advancing its pipeline. However, the decision to maintain the total authorized shares unchanged is noteworthy, as it preserves significant potential for future dilution - a common concern for investors in early-stage biotech companies.

The technical aspects of the split, including the cash settlement for fractional shares and automated adjustments for most shareholders, have been well-structured to minimize disruption. However, the key challenge lies in post-split market perception and trading dynamics. Companies implementing reverse splits often need to demonstrate strong fundamental progress to overcome the typically negative market sentiment associated with such corporate actions.

GRI’s common stock is expected to begin trading on a post-split adjusted basis on February 24, 2025

LA JOLLA, CA, Feb. 19, 2025 (GLOBE NEWSWIRE) -- GRI Bio, Inc. (NASDAQ: GRI) (“GRI Bio” or the “Company”), a biotechnology company advancing an innovative pipeline of Natural Killer T (“NKT”) cell modulators for the treatment of inflammatory, fibrotic and autoimmune diseases, today announced that the board of directors of the Company approved a 1-for-17 reverse stock split (the “Reverse Split”) of the Company’s common stock. The Reverse Split was approved by the stockholders of the Company at a special meeting of the Company held on February 11, 2025. The Reverse Split will legally take effect at 4:01 p.m. Eastern Time, on February 21, 2025. The Company’s common stock will open for trading under a new CUSIP number 3622AW 403 on The Nasdaq Capital Market on February 24, 2025, on a split-adjusted basis under the current ticker symbol “GRI.” The Reverse Split is intended to increase the per share trading price of the Company’s common stock to enable the Company to regain compliance with the minimum bid price requirement for continued listing on The Nasdaq Capital Market.

The 1-for-17 Reverse Split will automatically convert every seventeen (17) current shares of the Company’s common stock into one (1) share of common stock. No fractional shares will be issued in connection with the reverse stock split. Stockholders who would otherwise hold a fractional share of the Company’s common stock following the reverse stock split will receive a cash payment in lieu thereof at a price equal to that fractional share to which the stockholder would otherwise be entitled multiplied by the closing sale price of the common stock on The Nasdaq Capital Market, as adjusted for the reverse stock split, on February 21, 2025.

The Reverse Split will reduce the number of shares of outstanding common stock from approximately 8,933,366 shares, the number of shares outstanding as of February 18, 2025, to approximately 525,492 shares. The total authorized number of shares will not be reduced. Proportional adjustments will also be made to the exercise and conversion prices of the Company’s outstanding stock options, warrants, and convertible securities, and to the number of shares issued and issuable under the Company’s stock incentive plans.

Stockholders holding their shares electronically in book-entry form are not required to take any action to receive post-split shares. Stockholders owning shares through a bank, broker, or other nominee will have their positions automatically adjusted to reflect the Reverse Split, subject to brokers’ particular processes, and will not be required to take any action in connection with the reverse stock split. For those stockholders holding physical stock certificates, the Company’s transfer agent, Broadridge Corporate Issuers Solutions, Inc., will send instructions for exchanging those certificates for shares held electronically in book-entry form or for new certificates, in either case representing the post-split number of shares, and any payments in cash in lieu of fractional shares, if applicable.

About GRI Bio, Inc.

GRI Bio is a clinical-stage biopharmaceutical company focused on fundamentally changing the way inflammatory, fibrotic and autoimmune diseases are treated. GRI Bio’s therapies are designed to target the activity of Natural Killer T (“NKT”) cells, which are key regulators earlier in the inflammatory cascade, to interrupt disease progression and restore the immune system to homeostasis. NKT cells are innate-like T cells that share properties of both NK and T cells and are a functional link between the innate and adaptive immune responses. Type I invariant NKT (“iNKT”) cells play a critical role in propagating the injury, inflammatory response, and fibrosis observed in inflammatory and fibrotic indications. GRI Bio’s lead program, GRI-0621, is an inhibitor of iNKT cell activity and is being developed as a novel oral therapeutic for the treatment of idiopathic pulmonary fibrosis, a serious disease with significant unmet need. The Company is also developing a pipeline of novel type 2 diverse NKT (“dNKT”) agonists for the treatment of systemic lupus erythematosus. Additionally, with a library of over 500 proprietary compounds, GRI Bio has the ability to fuel a growing pipeline.

Forward Looking Statements

This press release contains “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as “anticipate,” “believe,” “contemplate,” “could,” “estimate,” “expect,” “intend,” “seek,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “target,” “aim,” “should,” “will,” “would,” or the negative of these words or other similar expressions. These forward-looking statements are based on the Company’s current beliefs and expectations. Forward-looking statements include, but are not limited to, statements regarding: the timing and effectiveness of the Reverse Split; the Company’s ability to regain compliance with the Nasdaq minimum bid price and other listing requirements; the Company’s expectations with respect to development and commercialization of the Company’s product candidates; the timing of initiation or completion of clinical trials and availability of resulting data, the potential benefits and impact of the Company’s clinical trials and product candidates and any implication that the data or results observed in preclinical trials or earlier studies or trials will be indicative of results of later studies or clinical trials. Actual results may differ from the forward-looking statements expressed by the Company in this press release and consequently, you should not rely on these forward-looking statements as predictions of future events. These forward-looking statements are subject to inherent uncertainties, risks and assumptions that are difficult to predict, including, without limitation: (1) the inability to maintain the listing of the Company’s common stock on Nasdaq and to comply with applicable listing requirements; (2) changes in applicable laws or regulations; (3) the inability of the Company to raise financing in the future; (4) the success, cost and timing of the Company’s product development activities; (5) the inability of the Company to obtain and maintain regulatory clearance or approval for its respective products, and any related restrictions and limitations of any cleared or approved product; (6) the inability of the Company to identify, in-license or acquire additional technology; (7) the inability of the Company to compete with other companies currently marketing or engaged in the development of products and services that the Company is currently developing; (8) the size and growth potential of the markets for the Company’s products and services, and their respective ability to serve those markets, either alone or in partnership with others; (9) the failure to achieve any milestones or receive any milestone payments under any agreements; (10) inaccuracy in the Company’s estimates regarding expenses, future revenue, capital requirements and needs for and the ability to obtain additional financing; (11) the Company’s ability to protect and enforce its intellectual property portfolio, including any newly issued patents; and (12) other risks and uncertainties indicated from time to time in the Company’s filings with the U.S. Securities and Exchange Commission (the “SEC”), including the risks and uncertainties described in the “Risk Factors” section of the Company’s most recent Annual Report on Form 10-K filed with the SEC on March 28, 2024 and subsequently filed reports. Forward-looking statements contained in this announcement are made as of this date, and the Company undertakes no duty to update such information except as required under applicable law.

Investor Contact:
JTC Team, LLC
Jenene Thomas
(908) 0824-0775
GRI@jtcir.com

FAQ

What is the ratio of GRI Bio's reverse stock split announced in February 2025?

GRI Bio announced a 1-for-17 reverse stock split, meaning every 17 current shares will be converted into 1 share of common stock.

When will GRI Bio's reverse stock split take effect?

The reverse stock split will legally take effect on February 21, 2025, at 4:01 p.m. Eastern Time, with split-adjusted trading beginning on February 24, 2025.

How many shares will GRI Bio have outstanding after the reverse split?

After the reverse split, GRI Bio's outstanding shares will reduce from approximately 8,933,366 to approximately 525,492 shares.

Why is GRI Bio implementing a reverse stock split in 2025?

GRI Bio is implementing the reverse split to increase its per share trading price to regain compliance with Nasdaq Capital Market's minimum bid price requirement for continued listing.

What happens to fractional shares in GRI Bio's reverse split?

Stockholders who would hold fractional shares after the reverse split will receive cash payments based on the closing price of GRI stock on February 21, 2025.