Company: PTHS
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001753926-25-000503
Chunk: 1068

Company: Pelthos Therapeutics Inc.
Filing Date: 2025-03-27
Form: 10-K
Item: Item 5
Chunk 1068
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 ended December 31, 2024 of $383,889 as compared to other expense for the year ended December
31, 2023 of $518,509. For the year ended December 31, 2024, compared to the same period in 2023, this represented a decrease
of $134,620 or 26%. The other expense for the years ended December 31, 2024
and 2023 was primarily the result of increased interest expense, net of a gain on default judgement of $363,091. The increase
in the interest expense was due to the remaining amortization of the debt discount on the Company’s notes being accelerated
upon the conversion of the notes to equity upon consummation of the IPO.

Liquidity

Sources
of Liquidity and Capital

We
are in our early stages of development and growth, without established records of sales or earnings. We will be subject to numerous
risks inherent in the business and operations of financially unstable and early stage or emerging growth companies. We have not
yet commercialized any products, and we do not expect to generate revenue from product sales of any of our compounds for several
years.

Cash
totaled $0.5 million and $0.1 million as of December 31, 2024 and December 31, 2023, respectively. As of December 31, 2024 and
December 31, 2023, we had an accumulated deficit of approximately $21.5 million and $13.5 million, respectively, and had a working
capital deficit of approximately $2.7 million and $6.4 million, respectively.

Historically,
we have funded our operations from a series of cash advances from Chromocell Holdings, licensing arrangements, bridge and note
issuances and grants from the National Institutes of Health.

76 

On
February 8, 2024, we and certain affiliates of the Representative entered into amendments to the senior secured convertible notes
issued to such affiliates of the Representative in the April Bridge Financing and September Bridge Financing to remove the automatic
conversion features from such notes (the “Bridge Financing Note Amendments”). Under the Bridge Financing Note Amendments,
both notes issued in the April Bridge Financing and the September Bridge Financing had a maturity date of March 1, 2024, and the
full principal amount of both notes and any accrued interest thereon was payable solely in cash upon the consummation of the IPO.
Both notes had an