GRI Bio, Inc. entered into a term sheet to acquire Vallon Pharmaceuticals, Inc. (NasdaqCM:VLON) from group of shareholders for $49 million in a reverse merger transaction on September 29, 2022. GRI Bio, Inc. entered into a definitive agreement to acquire Vallon Pharmaceuticals, Inc. (NasdaqCM:VLON) from group of shareholders for $49 million in a reverse merger transaction on December 13, 2022. Under the terms of the transaction, Vallon will acquire 100% of the outstanding equity interests of GRI Bio in an all-stock transaction, with each share of GRI's common stock converted solely into the right to receive a number of shares of Vallon's common stock equal to the exchange ratio. Concurrently with the execution of the merger agreement, Altium Capital has agreed to invest approximately $15 million at the close of the merger and committed to an additional $10 million future investment in the combined company (the “Financing”). Immediately following the closing of the merger and the financing, the equity holders of GRI Bio are expected to own approximately 83% of the outstanding equity of the combined company on a fully diluted basis, and the equity holders of Vallon are expected to own approximately 17% of the outstanding equity of the combined company on a fully diluted basis. GRI will pay a termination fee of $2 million to Vallon, in case GRI terminates the transaction, and Vallon will pay a fee of $2 million, in case Vallon terminates the transaction.

Following the closing of the merger, the combined company is expected to operate under the name “GRI Bio, Inc.” and will focus on the development of GRI Bio's pipeline and trade on The Nasdaq Capital Market (“Nasdaq”) under the ticker symbol “GRI”. The combined company will be led by Marc Hertz, GRI Bio's Chief Executive Officer, and will be headquartered in La Jolla, CA. The Board of Directors is expected to be composed of five members, with four such members designated by GRI Bio, one such member designated by Vallon. David Baker, Chief Executive Officer of Vallon will be joining the Board of Directors as the Vallon designee. The transaction is subject to approval by Vallon's stockholders including the approval of proposal of an amendment to the amended and restated certificate of incorporation of Vallon to effect a reverse stock split of Vallon common stock and GRI Bio's stockholders, shares of Vallon Common Stock to be issued in the Merger being approved for listing on Nasdaq, Registration Statement having become effective, Lock-Up Agreements entered into by the officers and directors will continue to be in full force and effect as of immediately following the Effective Time, Vallon's net cash at Closing shall not exceed negative $4,000,000 and other customary closing conditions. The transaction has been unanimously approved by the Board of Directors of both Vallon and GRI. The officers, directors and certain stockholders of Vallon covering less than 20% of the outstanding shares of Vallon Common Stock entered into support agreements in favor of GRI relating to the merger. The Special Stockholder Meeting of Vallon stockholders will be held on April 12, 2023. As of March 8, 2023, the registration statement has been declared effective. As of April 12, 2023, Vallon Pharmaceuticals adjourns special meeting of stockholders Until April 20, 2023. As on April 20, 2023, transaction was approved by the shareholders of Vallon Pharmaceuticals. The transaction is expected to close in the first quarter of 2023. As of February 24, 2023, the transaction is expected to close in the second quarter of 2023. The closing of the merger is anticipated to take place on April 21, 2023. The shares of Company common stock, previously trading on The Nasdaq Capital Market through the close of business on April 21, 2023 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.

Ladenburg Thalmann & Co. Inc. acted as financial advisor and Faith Charles and Naveen Pogula of Thompson Hine LLP acted as legal counsel to Vallon. Evolution Venture Partners LLC acted as the financial advisor and Adam Lenain of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. acted as legal counsel to GRI Bio. Ladenburg Thalmann & Co. Inc. acted as fairness opinion provider to Vallon's transaction committee. Vallon's transfer agent and registrar for Vallon Common Stock is Broadridge Corporate Issuer Solutions, Inc. Ladenburg will be entitled to receive a transaction fee of $1,100,000 payable in cash at the closing of the transaction and an opinion fee of $250,000 upon delivery of its Initial Opinion. On February 17, 2023, the merger agreement was amended to correctly state the name of the financial advisor assisting GRI, Ecoban Securities Corporation. Morrow Sodali LLC acted as proxy solicitor to Vallon and Vallon will pay $25,000 for the service. Evolution Venture Partners LLC acted as the exclusive strategic advisor with securities offered through Ecoban Securities Corporation.