United States securities and exchange commission logo
February 8, 2023
David Baker
Chief Executive Officer
Vallon Pharmaceuticals, Inc.
Two Logan Square
100 N. 18th Street, Suite 300
Philadelphia, PA 19103
Re: Vallon
Pharmaceuticals, Inc.
Amendment No. 1 to
Registration Statement on Form S-4
Filed January 30,
2023
File No. 333-268977
Dear David Baker:
We have reviewed your amended registration statement and have the
following
comments. In some of our comments, we may ask you to provide us with
information so we
may better understand your disclosure.
Please respond to this letter by amending your registration
statement and providing the
requested information. If you do not believe our comments apply to your
facts and
circumstances or do not believe an amendment is appropriate, please tell
us why in your
response.
After reviewing any amendment to your registration statement and
the information you
provide in response to these comments, we may have additional comments.
Unless we note
otherwise, our references to prior comments are to comments in our
January 19, 2023 letter.
Amendment No. 1 to Registration Statement on Form S-4
Questions and Answers About the Merger, page 1
1. We note your response
to prior comment 3. Please add a Q&A discussing the proposed
Reverse Split, the
reasons for the Reverse Split and the potential consequences to Vallon's
current stockholders.
In this Q&A, please state that the reverse split will not have an
impact on the percent
of ownership in the combined company by Vallon s current
stockholders following
the Merger, as you have done in your response.
2. Please revise the Q&A,
where appropriate, to briefly disclose each reset date upon which
Additional Shares may
be issued to the Investor, the number of Additional Shares that
David Baker
FirstName LastNameDavid
Vallon Pharmaceuticals, Inc.Baker
Comapany8,NameVallon
February 2023 Pharmaceuticals, Inc.
February
Page 2 8, 2023 Page 2
FirstName LastName
could be issued on each reset date and what will happen to the
escrowed Additional
Shares if the conditions for issuance to the Investor are not met.
Prospectus Summary
Reasons for the Merger, page 16
3. We refer to prior comment 6. Please revise your disclosure here and on
page 103 to reflect
your disclosure on page 18 that the Vallon Board instructed Ladenburg
not to incorporate
any potential adjustments to the Exchange Ratio in its initial opinion
and that therefore the
opinion delivered by Ladenburg on December 13, 2022 does not appear to
reflect the final
economic terms of the Merger.
Risk Factors
Vallon's charter documents and Delaware law may inhibit a takeover that
stockholders consider
favorable., page 56
4. We refer to prior comment 19. It appears that your choice of forum
provision applies to
Securities Act claims. Accordingly, please revise your disclosure here
and on pages 261-
262 to state that Section 22 of the Securities Act creates concurrent
jurisdiction for federal
and state courts over all suits brought to enforce any duty or
liability created by the
Securities Act or the rules and regulations thereunder and that there
is uncertainty as to
whether a court would enforce such a provision.
The Merger
Background of the Merger, page 98
5. We note your response to prior comment 10 and reissue in part. Please
quantify how
much of the final $49.0 million valuation for GRI was attributed to
the investment from
Altium and disclose the negotiated ownership percentage the Vallon
Board had agreed
upon. Also, further revise this section to discuss the details of the
"revised budget"
disclosed on page 101 and the major milestones included therein.
Opinion of Vallon's Financial Advisor
Discounted Cash Flow Analysis, page 114
6. Please revise your disclosure of the financial projections prepared by
Vallon's
management to address each of the following areas:
Clearly state when these projections were prepared and
management's reasons for
producing the projections. To the extent that a material amount of
time has passed
since these projections were prepared, disclose whether these
projections still reflect
management s views on future performance.
Disclose all material assumptions used to develop the projections,
including assumed
timing of regulatory approvals for GRI Bio's product candidates,
the length of time
from approval to commercial availability, assumptions about market
acceptance /
penetration rates, market growth rates and the impact of
competition.
David Baker
Vallon Pharmaceuticals, Inc.
February 8, 2023
Page 3
Explain why Vallon prepared projections for 16 years and discuss
any associated
risks related to projections covering operating results over this
time period.
Explain why Vallon did not include any profitability measures in
the projections.
7. We note the disclaimers throughout this section that readers are
cautioned not to rely
on the projections in making a decision regarding the transaction. While
it is acceptable
to include qualifying language concerning subjective analyses, it is
inappropriate to
indicate that investors cannot rely on disclosure. Please revise
accordingly.
Annex G, page G-1
8. Please revise to include the fairness opinion dated December 13, 2022 as
well as the
opinion dated January 26, 2023.
Exhibits
9. We note your response to prior comment 20. Please file the separate,
written consent of
Ladenburg Thalmann & Co. Inc. For guidance, refer to Item 601 of
Regulation S-K,
Securities Act Rule 436 and Question 233.01 of our Securities Act Rules,
Compliance and
Disclosure Interpretations.
You may contact Tara Harkins at 202-551-3639 or Daniel Gordon at
202-551-3486 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Tyler Howes at 202-551-3370 or Alan Campbell at 202-551-4224 with any
other
questions.
Sincerely,
FirstName LastNameDavid Baker
Division of
Corporation Finance
Comapany NameVallon Pharmaceuticals, Inc.
Office of Life
Sciences
February 8, 2023 Page 3
cc: Faith Charles, Esq.
FirstName LastName