Why Did Vallon (VLON) Skyrocketed 145% Higher In Pre-Hour Trades On Wednesday?

At the time of our last check, shares of Vallon Pharmaceuticals Inc. (Nasdaq: VLON) were up 145.91%, trading at $0.6187 in pre-market, after the company had signed a merger agreement.

Which contract has VLON signed?

The privately held biotechnology company GRI Bio, Inc. (“GRI Bio”), which is developing a novel pipeline of natural killer T (“NKT”) cell regulators for the cure of inflammatory, fibrotic, and autoimmune diseases, and Vallon (VLON), have entered into a binding agreement (the “Merger Agreement”). According to the terms of the proposed merger, GRI Bio will combine with a Vallon subsidiary that is a full-fledged subsidiary in an all-stock transaction (the “Merger”).

Inflammatory, fibrotic, and autoimmune illnesses will be treated using the unique NKT cell regulators in GRI Bio’s pipeline, which will be the company’s main area of concentration. After the merger is completed, the merged business is anticipated to trade on The Nasdaq Capital Market (“Nasdaq”) under the ticker symbol “GRI,” focus on building GRI Bio’s pipeline, and operate under the name “GRI Bio, Inc.”

VLON anticipates that the deal will be completed in the first quarter of 2023. Today at 8:30 AM ET, the firms will hold a joint webcast to talk about the deal. Altium Capital (“Altium”) has agreed to invest around $15 million at the merger’s closing concurrent with the signing of the merger agreement. This investment will be made in cash and through the return of GRI Bio promissory notes that were acquired from GRI Bio at the same time as the Merger Agreement was signed.

Additionally, Altium agreed to invest an additional $10 million in the merged business in the future (the “Financing”), provided that the requirements outlined in the relevant agreements and securities purchase agreements are satisfied. The funds from the Financings are anticipated to be used by the merged business to advance GRI Bio’s NKT research pipeline, which initially aims to treat idiopathic pulmonary fibrosis (IPF), and various inflammatory, fibrotic, and autoimmune indications until mid-2024.

What possibilities does that merger have for VLON?

After conducting a full and in-depth strategic analysis, Vallon (VLON) determined that a merger with GRI Bio was the best course of action for its shareholders. Using its cutting-edge NKT regulator technology to advance a potentially extensive pipeline, GRI Bio offers an intriguing prospect for profit generation. The merged firm, in the opinion of the VLON board and management, will be well-positioned to address issues with current therapeutic therapies that target fibrosis and inflammation across a variety of high-value indications.

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