# EDGAR Filing Document

**Accession Number:** 0001824293
**File Stem:** 0001628280-23-001689
**Filing Date:** 2023-1
**Character Count:** 17514
**Document Hash:** 87b23a4b5233b461ba546e1ab662c943
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001628280-23-001689.hdr.sgml**: 20230425

**ACCESSION NUMBER**: 0001628280-23-001689

**CONFORMED SUBMISSION TYPE**: CORRESP

**PUBLIC DOCUMENT COUNT**: 5

**FILED AS OF DATE**: 20230127

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Vallon Pharmaceuticals, Inc.
- **CENTRAL INDEX KEY:** 0001824293
- **STANDARD INDUSTRIAL CLASSIFICATION:** PHARMACEUTICAL PREPARATIONS [2834]
- **IRS NUMBER:** 824369909
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** CORRESP

**BUSINESS ADDRESS:**
- **STREET 1:** 2223 AVENIDA DE LA PLAYA
- **STREET 2:** SUITE 208
- **CITY:** LA JOLLA
- **STATE:** CA
- **ZIP:** 92037
- **BUSINESS PHONE:** (619) 400-1171

**MAIL ADDRESS:**
- **STREET 1:** 2223 AVENIDA DE LA PLAYA
- **STREET 2:** SUITE 208
- **CITY:** LA JOLLA
- **STATE:** CA
- **ZIP:** 92037

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Vallon Pharmaceuticals, Inc.
- **DATE OF NAME CHANGE:** 20200910

![image_3.jpg](image_3.jpg)

January 27, 2023

<u>Via EDGAR Transmission</u>

Alan Campbell

Tyler Howes

United States Securities and Exchange Commission

Division of Corporation Finance

Office of Life Sciences

100 F Street, N.E.

Washington, D.C. 20549

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| | |
|:---|:---|
| **Re:** | **Vallon Pharmaceuticals, Inc.** |
| | **Registration Statement on Form S-4** |
| | **Filed December 23, 2022** |
| | **File No. 333-268977** |

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Dear Sirs:

On behalf of Vallon Pharmaceuticals, Inc. (the "***Company***"), we are writing in response to the letter from the staff (the "***Staff***") of the Division of Corporation Finance, Office of Life Sciences, of the U.S. Securities and Exchange Commission (the "***Commission***"), dated January 19, 2023 (the "***Comment Letter***"), relating to the Company's Registration Statement on Form S-4, filed with the Commission on December 23, 2022. Responses to the comments in the Comment Letter are set forth in this letter, and the Company is concurrently submitting an amended registration statement on Form S-4 (the "***Amended Registration Statement***").

Please note that, for the Staff's convenience, we have recited the Staff's comments in italics and provided the Company's responses to such comments immediately thereafter. Except for any page references appearing in the Staff's comments, all page references herein correspond to the page of the Amended Registration Statement. Capitalized terms used but not defined in this letter have the meanings ascribed to such terms in the Amended Registration Statement.

*<u>Registration Statement on Form S-4 filed December 23, 2022</u>*

*<u>Cover Page</u>*

*1.&nbsp;&nbsp;&nbsp;&nbsp;Please prominently disclose here the expected ownership percentage of Altium Growth Fund, LP following the Merger assuming all warrant exercises and receipt of all escrowed shares as you have done on pages 2 and 147. Please also make similar revisions throughout the prospectus where ownership percentages are disclosed as well as in your "Equity Financing and Series T Warrant Exercises" section.*

**Response:**&nbsp;&nbsp;&nbsp;&nbsp;In response to the Staff's comment, we have revised the disclosure on the cover page and pages 3, 4, 19, 29, 32, 134, 135, 154, 155 and 157 of the Amended Registration Statement accordingly.

![image_2.jpg](image_2.jpg)

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![image_1.jpg](image_1.jpg)

*<u>Questions and Answers About the Merger, page 1</u>*

*2.&nbsp;&nbsp;&nbsp;&nbsp;Please revise your disclosure in this section, and elsewhere in the prospectus, as appropriate, to disclose the status of your conversations with Nasdaq, including the impact that a potential delisting would have on the Merger.*

**Response:**&nbsp;&nbsp;&nbsp;&nbsp;In response to the Staff's comment, we have revised pages 5, 35 and 36 of the Amended Registration Statement accordingly. &nbsp;&nbsp;&nbsp;&nbsp;

*3.&nbsp;&nbsp;&nbsp;&nbsp;Please revise your disclosure in this section, and elsewhere in the prospectus, as appropriate, to briefly discuss whether the execution of the Reverse Split would impact the percentage of stock owned in the combined company by Vallon's current stockholders following the Merger.*

**Response:**&nbsp;&nbsp;&nbsp;&nbsp;In response to the Staff's comment, we respectfully advise the Staff that the execution of the Reverse Split would not have an impact on the percentage of stock owned in the combined company by Vallon's current stockholders following the Merger. As such, we have not made any amendments to the disclosure.

*4.&nbsp;&nbsp;&nbsp;&nbsp;Please revise your disclosure in this section to include a question and answer, or multiple questions and answers, specifically addressing the following points:*

&nbsp;&nbsp;&nbsp;&nbsp;*Disclose potential exchange ratios at (i) various levels of Vallon's net cash and (ii) potential required reductions to Vallon's valuation required in order to meet Nasdaq's listing requirements. In your revisions, please show ownership in the combined company among GRI's equityholders, Vallon's equityholders and the Investor.*

&nbsp;&nbsp;&nbsp;&nbsp;*Disclose whether you anticipate that Vallon's valuation will need to be reduced in order to meet the initial listing requirements of Nasdaq, based upon currently available information and the current trading price of Vallon's common stock*.

&nbsp;&nbsp;&nbsp;&nbsp;*Disclose potential exercise prices of the Series A-1, A-2 and T Warrants based upon currently available information, including the potential for cashless exercises.*

&nbsp;&nbsp;&nbsp;&nbsp;*Disclose fully-diluted ownership in the combined company, including the Series A-1, A-2 and T Warrants.*

**Response:**&nbsp;&nbsp;&nbsp;&nbsp;In response to the Staff's comment, we have revised the disclosure on pages 1 through 5 of the Amended Registration Statement accordingly.

*<u>Q: Who will be the directors of Vallon following the Merger?, page 5</u>*

*5.&nbsp;&nbsp;&nbsp;&nbsp;When available, please disclose the anticipated directors of the combined company.*

**Response:**&nbsp;&nbsp;&nbsp;&nbsp;In response to the Staff's comment, we respectfully advise the Staff that we have currently disclosed the names of the directors that we expect to be appointed to the combined company and will publicly disclose the remaining directors once such individuals are identified.

![image_0.jpg](image_0.jpg)

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![image_1.jpg](image_1.jpg)

*<u>Prospectus Summary</u>*

*<u>Opinion of Vallon's Financial Advisor, page 15</u>*

*6.&nbsp;&nbsp;&nbsp;&nbsp;Please revise your disclosure here and throughout the prospectus where the fairness opinion is described to reflect your statement on page 103 that, at the request of the Vallon Board, for the purposes of its opinion, Ladenburg assumed that no "Adjustment" (as defined on page 103) would occur despite management of Vallon advising Ladenburg that, as of the date of the opinion, such an Adjustment would be required. Please also revise here and on page 103 to explain why the Vallon Board instructed Ladenburg to prepare its opinion without incorporating an Adjustment, despite Vallon's management advising that an Adjustment would be required.*

**Response:**&nbsp;&nbsp;&nbsp;&nbsp;In response to the Staff's comment, we have revised the disclosure on pages 18, 19 and 108 of the Amended Registration Statement to reflect the delivery of an updated fairness opinion from Ladenburg, at the request of the Vallon Board, which assumes a potential downward Adjustment to the Vallon Base Equity Value to the $5.0 million floor. Furthermore, in light of the recent trading performance of Vallon's common stock that has approximated $0.30 for the last several days, we have revised relevant information throughout the Amended Registration Statement, including the Exchange Ratio, Vallon Base Equity Value and pro forma financials presentation to assume a per share Vallon Common Stock price of $0.30, as we believe this per share price more accurately reflects the anticipated Exchange Ratio and Vallon Base Equity Value at the closing of the Merger.

*7.&nbsp;&nbsp;&nbsp;&nbsp;We note your statements here and elsewhere in the prospectus, as well as in the fairness opinion attached as Annex G, that the opinion is intended for the sole benefit of Vallon's board of directors. Please remove this statement.* 

*Alternatively, please disclose the legal basis for your and Ladenburg's belief that stockholders cannot rely on the opinion to bring state law actions, including a description of any state law authorities on such a defense. If no such authority exists, please disclose that this issue will be resolved by a court, resolution of this issue will have no effect of on rights and responsibilities of Vallon's board under state law and the availability or non-availability of this defense has no effect on the rights and responsibilities of either Ladenburg or Vallon's board under federal securities laws.*

**Response:**&nbsp;&nbsp;&nbsp;&nbsp;In response to the Staff's comment, we have revised the disclosure on pages 18 and 108 of the Amended Registration Statement accordingly.

*<u>Risk Factors</u>*

*<u>Litigation relating to the Merger could require Vallon or GRI to incur significant costs…, page 30</u>*

*8.&nbsp;&nbsp;&nbsp;&nbsp;Please revise this risk factor to disclose if the parties are aware of any litigation related the merger agreement. To the extent the parties are not aware of any litigation, please include an affirmative statement to that effect.* 

**Response:**&nbsp;&nbsp;&nbsp;&nbsp;In response to the Staff's comment, we have revised the disclosure on page 35 of the Amended Registration Statement accordingly.

![image_0.jpg](image_0.jpg)

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![image_1.jpg](image_1.jpg)

*<u>The Merger</u>*

*<u>Background of the Merger, page 93</u>*

*9.&nbsp;&nbsp;&nbsp;&nbsp;Please revise your disclosure to state why Vallon's management chose to re-engage in discussions with Company A in early September ahead of re-engaging in discussions with GRI and describe the terms upon which Vallon and Company A were unable to reach agreement.*

**Response:**&nbsp;&nbsp;&nbsp;&nbsp;In response to the Staff's comment, we have revised the disclosure on page 101 of the Amended Registration Statement accordingly.

*10.&nbsp;&nbsp;&nbsp;&nbsp;We note your statement that changes to GRI's proposal included a revised budget that could achieve major milestones with less pending than originally proposed and a willingness to revise relative valuation and ownership in the merged company. Please quantify both the valuation in GRI's initial proposal and final valuation attributed to GRI. To the extent there is a material difference in the initial and final valuation, include disclosure explaining the reasoning for such changes. Please also revise this section to include a more fulsome discussion of the negotiations of the Exchange Ratio. Finally, please revise to describe the details of the revised budget and the major milestones included therein.*

**Response:**&nbsp;&nbsp;&nbsp;&nbsp;In response to the Staff's comment, we have revised the disclosure on pages 101, 102 and 103 of the Amended Registration Statement accordingly.

*11.&nbsp;&nbsp;&nbsp;&nbsp;Please revise your disclosure in this section to describe the discussions and negotiations with the Investor leading to the Equity Financing.*

**Response:**&nbsp;&nbsp;&nbsp;&nbsp;In response to the Staff's comment, we have revised the disclosure on pages 99, 101, 102 and 103 of the Amended Registration Statement accordingly.

*<u>Vallon Reasons for the Merger, page 97</u>*

*12.&nbsp;&nbsp;&nbsp;&nbsp;Your disclosure here and on page 14 indicates that the Exchange Ratio formula is based on a Vallon valuation of $26.0 million. However, disclosure elsewhere in the prospectus, including on page 1, indicates that the Exchange Ratio formula is based on a Vallon valuation of $29.0 million. Please reconcile your disclosure or advise.*

**Response:**&nbsp;&nbsp;&nbsp;&nbsp;In response to the Staff's comment, we have reviewed the disclosure and confirmed that all instances reference Vallon's valuation at a total of $26.0 million. We respectfully advise the Staff that the discrepancy in the Company's valuations is due to the downward adjustment based upon the Company's expected negative net cash on the Closing Date, so that in some instances, the valuation is indicated as $29.0 million less $3.0 million in negative net cash whereas in others the valuation is indicated as $26.0 million (which assumes the negative cash reduction).

*<u>Opinion of Vallon's Financial Advisor, page 102</u>*

*13.&nbsp;&nbsp;&nbsp;&nbsp;We note your disclosure on page 103 that Ladenburg Thalmann & Co. Inc. reviewed GRI's projections for purposes of its analyses. Please disclose these projections and any "internal financial analyses" upon which Ladenburg Thalmann & Co. relied to render its fairness opinion.*

**Response:**&nbsp;&nbsp;&nbsp;&nbsp;In response to the Staff's comment, we have revised the disclosure on page 109 of the Amended Registration Statement accordingly.

![image_0.jpg](image_0.jpg)

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![image_1.jpg](image_1.jpg)

*<u>The Merger Agreement</u>*

*<u>Conditions to the Completion of the Merger, page 137</u>*

*14.&nbsp;&nbsp;&nbsp;&nbsp;Please revise to clearly identify which conditions the parties may waive and proceed with the merger agreement.*

**Response:**&nbsp;&nbsp;&nbsp;&nbsp;In response to the Staff's comment, we have revised the disclosure on pages 143 through 148 of the Amended Registration Statement accordingly.

*<u>Description of GRI's Business, page 167</u>*

*15.&nbsp;&nbsp;&nbsp;&nbsp;Please revise this section, where appropriate, to include a discussion of the manufacture and supply of your product candidates. To the extent material, please ensure that your discussion reflects your statement on page 78 that you are reliant on a sole supplier, or, in some cases, a limited number of suppliers, for the manufacture of your product candidates.*

**Response:**&nbsp;&nbsp;&nbsp;&nbsp;In response to the Staff's comment, we have revised the disclosure on pages 188 and 191 of the Amended Registration Statement accordingly.

*<u>Overview, page 167</u>*

*16.&nbsp;&nbsp;&nbsp;&nbsp;We note your statement that you are initiating a Phase 1a/1b trial of GRI-0803 and your disclosure here and on page 169 that you anticipate topline results from this trial to be available in the second quarter of 2024. However, we note that you do not appear to have an active IND for this trial. Please refrain from making predictions that assume successful clearances of INDs or successful clinical trials. You may state when you intend to submit your IND for this trial.*

**Response:**&nbsp;&nbsp;&nbsp;&nbsp;In response to the Staff's comment, we have revised the disclosure on pages 177 and 179 of the Amended Registration Statement accordingly.

*<u>Our Pipeline, page 168</u>*

*17.&nbsp;&nbsp;&nbsp;&nbsp;Please revise your pipeline table to shorten bar for GRI-0803 as disclosure on page 180 indicates that you have not yet submitted an IND for this candidate, or advise. Please also remove the blue arrows and text from the pipeline arrows. Finally, based on your disclosure on pages 54 and 109, neither GRI-0124 nor GRI-0729 is currently in development. Please remove these candidates from your pipeline table. We do not object to narrative discussion of GRI-0124 and GRI-0729 in the GRI Business section.*

**Response:**&nbsp;&nbsp;&nbsp;&nbsp;In response to the Staff's comment, we have revised the disclosure on page 178 of the Amended Registration Statement accordingly.

*18.&nbsp;&nbsp;&nbsp;&nbsp;Please revise here, or elsewhere in the Business section, as appropriate, to discuss in further detail the results from your pilot Phase 2a trial of GRI-0621, including whether the trial achieved its endpoints, the frequency and nature of any observed adverse events and if adverse events were linked to treatment.*

**Response:**&nbsp;&nbsp;&nbsp;&nbsp;In response to the Staff's comment, we have revised the disclosure on pages 187 and 188 of the Amended Registration Statement accordingly.

![image_0.jpg](image_0.jpg)

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![image_1.jpg](image_1.jpg)

*<u>Description of Vallon Capital Stock</u>*

*<u>Choice of Forum, page 255</u>*

**Response:**&nbsp;&nbsp;&nbsp;&nbsp;In response to the Staff's comment, we have revised the disclosure on pages 56 and 57 of the Amended Registration Statement accordingly.

*<u>Exhibits</u>*

*20.&nbsp;&nbsp;&nbsp;&nbsp;Please file the consent of Ladenburg Thalmann & Co. Inc. as an exhibit to this registration statement. For guidance, refer to Item 601 of Regulation S-K.*

**Response:**&nbsp;&nbsp;&nbsp;&nbsp;In response to the Staff's comment, we respectfully advise the Staff that the consent of Ladenburg Thalmann & Co. Inc. is contained within the Opinion itself and a reference shall be made in the exhibit index in the Amended Registration Statement to such consent.

We appreciate the Staff's comments and request the Staff contact the undersigned at (212) 908-3905 or the Company at (267) 207-3606 with any questions or comments regarding this letter.

![image_0.jpg](image_0.jpg)

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| |
|:---|
| Very truly yours, |
| THOMPSON HINE LLP |

---

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| | |
|:---|:---|
| cc: | David Baker, *Vallon Pharmaceuticals, Inc.* |
| | Faith L. Charles, *Thompson Hine LLP* |
| | Naveen Pogula, *Thompson Hine LLP* |

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