Company: PTHS
Filing Date: 2025-05-27
Form Type: DEFM14C
Source: 0001140361-25-020509
Chunk: 577

Company: Pelthos Therapeutics Inc.
Filing Date: 2025-05-27
Form: DEFM14C
Chunk 577
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 regarding future product sales.

Prior to obtaining initial regulatory approval for ZELSUVMI, the Company expensed costs relating to production of pre-launch inventory as research and development expense in its statements of operations in the period incurred. Inventory acquired and the related costs after January 5, 2024, the date of the FDA’s approval of ZELSUVMI, are capitalized. As of December 31, 2024, the amount of LNHC inventory consisted of $3,923 work-in-progress and $603 raw materials. Products used in clinical trials are expensed as research and development expense in the statements of operations.

Additionally, the Company’s product is subject to strict quality control and monitoring that is performed throughout the manufacturing process, including release of work-in-process to finished goods. In the event that

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certain batches or units of product do not meet quality specifications, the Company records a write-down of any potential unmarketable inventory to its estimated net realizable value. The amount of expense related to inventory write down as a result of excess, obsolescence, scrap, or other reasons during the year ended December 31, 2024 amounted to $239, and was recorded as research and development expense in the statements of operations. Any of such expenses incurred subsequent to ZELSUVMI commercial launch date, will be recorded as cost of sales. Property and Equipment Property and equipment are recorded at cost and depreciated using the straight-line method over their estimated useful lives as follows:

| Computer equipment                     |     | 3 years   |
| Software                               |     | 3-5 years |
| Furniture and fixtures                 |     | 5-7 years |
| Manufacturing and laboratory equipment |     | 7 years   |

Leasehold improvements are amortized over the shorter of the life of the lease or the useful life of the improvements. Expenditures for maintenance and repairs are expensed as incurred. Improvements and betterments that add new functionality or extend the useful life of an asset are capitalized. Leases for real estate often include tenant improvement allowances, which the Company assesses according to applicable accounting guidance to determine the appropriate owner, and capitalizes such tenant improvement assets accordingly. Leases The Company leases office space under non-cancelable lease agreements. The Company applies the accounting guidance in ASC 842, Leases.As such, the Company assesses all arrangements, that convey the right to control the use of property, plant and equipment, at