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CORRESP
1
filename1.htm

    June
    30, 2023

Division
of Corporation Finance

Office
of Manufacturing

Securities
and Exchange Commission

100
F Street, NE

Washington,
D.C. 20549

Attn:
Eric Atallah and Mary Mast

    Re:
    Impact BioMedical Inc.

    Amendment
    No. 11 to Registration Statement on Form S-1

    Filed
    June 21, 2023

    File No. 333-253037

Dear
Mr. Atallah and Ms. Mast:

On
behalf of Impact BioMedical Inc. (the “Company”), this letter responds to comments provided by the staff of the Division
of Corporation Finance (the “Staff”), of the Securities and Exchange Commission (the “Commission”) provided to
the undersigned on June 27, 2023 regarding the Company’s Registration Statement on Form S-1.

For
convenience, the Staff’s comments have been restated below and the Company’s responses are set out immediately under the
restated comments. Unless otherwise indicated, defined terms used herein have the meanings set forth in the S-1.

Amendment
No. 11 to Registration Statement on Form S-1

Capitalization,
page 17

1. We
                                            note your response and revised disclosures to prior comment 1. It does not appear as though
                                            you have included your notes payable in your total capitalization. Please explain why notes
                                            payable is not included in your total capitalization or revise your filing accordingly. Also,
                                            please tell us why Non-controlling interest in subsidiary is included in Total capitalization
                                            or remove the line item.

Response:
The capitalization table has been updated to include the note payable to the related party. Also, the capitalization table has
been updated to illustrate the retained earnings associated with Impact BioMedical as well as the non-controlling interest of the Company’s
subsidiaries.

2. As
                                            a related matter please update your capitalization table to be consistent with the most recent
                                            balance sheet included in your filing (i.e., March 31, 2023)

Response:
The capitalization table has been updated to reflect March 31, 2023.

Note
8. Goodwill, page F-12

    3.
    We
    note your response and revised disclosures in response to prior comment 3. Regarding your valuation under the income approach, please
    tell us why you believe the material assumptions you used including future sales, operating margins, discount rates, and growth rates
    are reasonably supportable given the current stage of development.

Response:
Under AICPA guidelines, we believe the Company is currently in stage 4 of development described as “Enterprise has
met additional key development milestones (for example, first customer orders or first revenue shipments) and has some product revenue,
but it is still operating at a loss. Typically, mezzanine rounds of financing occur during this stage. Also, it is frequently
in this stage that discussions would start with investment banks for an initial public offering (IPO).” This determination is supported
by an independent third party that performed their quantitative analysis of the Company’s goodwill.

There have been several developments
to its acquiring the business in 2020 to support our assumptions around future sales margins and growth rates. Those include but are
not limited to:

 i. The
                                            biotechnology industry in which we operate per the IBISWorld Industry Report NN001 Biotechnology
                                            in the U.S., dated January of 2022, estimates the current market size at approximately
                                            $137.6 billion. Growth over the 2016 through 2021 period is estimated at a rate of negative
                                            0.4% per annum. Over the next five years, industry growth is projected at 2.2% per annum.

 ii. In
                                            line with the Company’s research, discovery and license business model, the Company
                                            has executed licensing agreements on four of its discovery assets, i.e. Equivir,
                                            Equivir-G, Linebacker 1 and Linebacker 2, with an experienced publicly traded biotech
                                            pharmaceutical company. That partner is conducting next stage studies and development of
                                            those licensed technologies, with immediate plans to market, distribute and sell the technology.
                                            These third-party licensing agreements provide for third-party funding for the continued
                                            testing, development, and advancement of these next generation technologies. This business
                                            model of discovery and then licensing significantly reduces, or eliminates, the company’s
                                            cost to bring these products to market and generate revenue and shifts that cost responsibility
                                            to its licensing partner.

 iii. Since
                                            acquiring the company in 2020, the management team have discovered at least 6 new biohealth
                                            based discoveries which it has added to its portfolio; each with significant research support
                                            and licensing interest. Several of the previously acquired other technologies, and the newer
                                            discoveries, that are not currently under a licensing agreement, are, or are slated to be,
                                            in validation testing and development by multiple third-party partners seriously interested
                                            in the technologies. If those validation tests go as planned, then there is a high likelihood
                                            that future agreements for licensing and royalties will be negotiated.

 iv. For
                                            certain technologies, we have been in active adaptation testing with existing qualified manufacturing
                                            partners to incorporate our advanced technologies into their existing international marketed
                                            products which if comes to fruition will generate significant, potential future revenues
                                            for the company.

  v. Our
                                            research and development partners continue to identify new, patentable technologies that
                                            we believe are unique in the industry and will provide us with material new revenue streams.

Regarding the discount rate used by the independent third party that performed the valuation of our goodwill balance as
of June 1, 2022, the stage 4 of development that we are currently in. In order to support the discount rate determined, multiple venture
capital studies were reviewed which disclose a range of returns required depending on the stage of development for the subject company.
This stage of development translates into discount rates in the 35% to 50% range.  Based upon this range, we feel our discount rate
is reasonable. The studies reviewed are summarized below:

    4.
    As a related matter, we note your disclosures
    on page F-25 that during the year ended December 31, 2022, you used qualitative factors to determine whether it was more likely than
    not that the fair value of a reporting unit exceeded its carrying amount. Please reconcile the disclosure on page F-25 to your disclosure
    in this footnote which indicates that you performed quantitative goodwill testing during the year ended December 31, 2022.

Response: The related footnotes have been
updated for the correct terminology.

5. We
                                            note from your response and revised disclosures in response to prior comment 4 that you may
                                            use internal discounted cash flow estimates, quoted market prices, when available, and independent
                                            appraisals, as appropriate, to determine fair value. However it does not appear as though
                                            you have discussed the valuation methodology and key assumptions used in your most recent
                                            impairment analysis, as previously requested. Please advise us or revise your filing accordingly

Response:
Footnote 9 has been updated to identify the methodology used as qualitative and the key factors considered.

Should
you have any questions regarding the foregoing, please do not hesitate to contact the Company’s counsel, Darrin Ocasio, of Sichenzia
Ross Ference LLP at (212) 930-9700.

    Sincerely,

    Frank D. Heuszel

    Chief Executive Officer

    cc:
    Darrin M. Ocasio, Esq.