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Vallon Pharmaceuticals and GRI Bio, Inc. Merger Approved by Stockholders

On April 20, 2023, Vallon Pharmaceuticals, Inc. (NASDAQ: VLON) "Vallon", announced that during a special meeting, its stockholders have given the green light for the merger with GRI Bio, Inc. “GRI Bio”, a privately held biotech firm. This move is accompanied by a 1-for-30 reverse stock split, also approved by the stockholders.

The Merger Details

During the special meeting, the stockholders voted in favor of Proposals 1, 2, 4, and 5, all linked to the pre-announced merger plans. As a result, at the time when the merger becomes effective, each share of GRI's common stock will be automatically converted into the right to receive a quantity of Vallon's common stock shares equal to the exchange ratio defined in the merger agreement. Based on Vallon's common stock closing price of $0.46 per share on April 20, 2023, the exchange ratio is set at 0.0374.

Reverse Stock Split

Along with the merger, Vallon's stockholders have agreed to a reverse stock split of Vallon's common stock shares. The approved ratio ranges from not less than 1 new share for every 15 shares and not more than 1 new share for every 40 shares. Vallon's board of directors set the Reverse Split ratio at 1-for-30, implying that every 30 shares of Vallon common stock will be converted into one share.

CEO Comments on the Merger

David Baker, Vallon's Chief Executive Officer, expressed his gratification and satisfaction with the stockholders' decision. He stated, "We are pleased and gratified that the majority of our stockholders, through their votes in favor of the merger, see the same potential with GRI Bio that Vallon and our board does. We look forward to the future of the combined company and advancing a deep pipeline with the potential to address shortcomings that exist with current therapeutic treatments targeting inflammation and fibrosis across a number of high-value indications.”

Voting Results

Approximately 67% of the Company's total outstanding shares were voted. From the outstanding shares voted, 91% were for Proposal 1; 90% for Proposal 2; 84% for Proposal 3; 86% for Proposal 4; and 89% for Proposal 5. The detailed voting results from the special meeting of stockholders held on April 20, 2023, are available in the Form 8-K filed with the SEC.

Investment by Altium Capital

As previously announced, Altium Capital (“Altium”) agreed to invest approximately $15 million at a pre-money valuation of $75 million. $2.5 million has already been invested, and an additional $12.25 million will be invested coinciding with the merger's close. The combined company is expected to use the investment proceeds to fund the advancement of GRI Bio’s Natural Killer T (“NKT”) development pipeline targeting multiple inflammatory, fibrotic and autoimmune indications into mid-2024 with an initial focus on idiopathic pulmonary fibrosis (“IPF”).

Closing Date and Post Merger Details

The merger is set to close on April 21, 2023, resulting in a combined company that will operate under the name “GRI Bio, Inc.” The merged entity will focus on advancing GRI Bio’s innovative pipeline of NKT cell modulators for the treatment of inflammatory, fibrotic and autoimmune diseases.

The shares of the company, previously trading on The Nasdaq Capital Market under the ticker symbol “VLON,” are expected to commence trading on The Nasdaq Capital Market, on a post-Reverse Split adjusted basis, under the ticker symbol “GRI”, effective April 24, 2023.

About Vallon Pharmaceuticals

Vallon is a clinical-stage biopharmaceutical company, headquartered in Philadelphia, PA. The Company has been focused on the development of new medications to help patients with CNS disorders.

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’s therapies are designed to target the activity of NKT cells, which are key regulators earlier in the inflammatory cascade, to interrupt disease progression and restore the immune system to homeostasis.

GRI Bio's Programs

GRI’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 IPF, a serious disease with significant unmet need. GRI is also developing a pipeline of novel Type 2 NKT agonists for the treatment of systemic lupus erythematosus. Additionally, with a library of over 500 proprietary compounds, GRI has the ability to fuel a growing pipeline.

The merger between Vallon Pharmaceuticals and GRI Bio Inc. marks a significant milestone in the biopharmaceutical industry. It opens up new possibilities for the advancement of innovative treatments for inflammatory, fibrotic, and autoimmune diseases. The combined entity, under the GRI Bio, Inc. banner, is expected to bring about a new era of therapies that can address the existing shortcomings in current therapeutic treatment options.


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