Company: PTHS
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001753926-25-000503
Chunk: 175

Company: Pelthos Therapeutics Inc.
Filing Date: 2025-03-27
Form: 10-K
Item: Item 1
Chunk 175
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via License Agreement in
no event shall be less than Benuvia’s cost of manufacturing the respective Spray Formulation plus a gross margin to Benuvia.
The price for each Spray Formulation shall be subject to an annual increase in amounts equal to the percentage change in the Producer
Price Index, Pharmaceutical Preparations as published by the U.S. Department of Labor, Bureau of Labor Statistics.

Under
the terms of the Benuvia License Agreement, we obtained exclusive, worldwide rights to develop, commercialize and distribute the
Spray Formulations. In connection with the Benuvia License Agreement, we agreed to pay Benuvia a six and one-half percent (6.5%)
royalty on net sales of the Spray Formulations for a period of up to 15 years from the date of the first commercial sale of the
Spray Formulations. To date, we have paid $0 to Benuvia as royalty on net sales of the Spray Formulations. Pursuant to the Benuvia
Stock Issuance Agreement, we issued to Benuvia 384,226 shares of our Common Stock, which may be offered and sold pursuant to the
Resale Prospectus. Benuvia will be responsible for the manufacturing and supply of the Spray Formulations, which is capped not
to exceed a specific gross margin for Benuvia, and we have a most favored nation rate on development and regulatory services.

Under
the Benuvia License Agreement, we will have exclusive, worldwide rights to develop, commercialize and distribute the Spray Formulations.
Further, we have the right to request a bid from a third party to manufacture the Spray Formulations once each year.

The
Benuvia License Agreement contains standard termination provisions. The Benuvia License Agreement may be terminated in its entirety,
on a Spray Formulation by Spray Formulation basis, and by country by county for a material breach not cured within sixty (60)
days after written notice thereof. If we breach any of our payment obligations under the terms of the Benuvia License Agreement
that are not the subject of a good faith dispute and are not cured within twenty (20) business days following notice thereof,
Benuvia may terminate the Agreement upon written notice to us. We also have the right to terminate the Benuvia License Agreement
in the event we determine, in our reasonable business judgment, that (i) any of the Spray Formulations will not be differentiated
from oral tablets to result in a financially viable product or (ii