Company: PTHS
Filing Date: 2025-05-27
Form Type: DEFM14C
Source: 0001140361-25-020509
Chunk: 228

Company: Pelthos Therapeutics Inc.
Filing Date: 2025-05-27
Form: DEFM14C
Chunk 228
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 beginning on page 145in this information statement. The exchange ratio formula is the quotient obtained by dividing the number of LNHC merger shares (defined below) by the number of LNHC outstanding shares (defined below), in which:

| • | “Aggregate valuation” means the sum of the (i) LNHC valuation, plus (ii) the Channel valuation; |

| • | “Channel allocation percentage” means the quotient determined by dividing (i) the Channel valuation by (ii) the aggregate valuation; |

| • | “Channel closing price” means the volume weighted average closing trading price of a share of Channel common stock on The NYSE American for the five consecutive trading days ending five trading days immediately prior to the date upon which the draft exchange ratio schedule is delivered pursuant to the Merger Agreement (not less than 10 business days prior to the anticipated closing date); |

| • | “Channel outstanding shares” means the total number of shares of Channel common stock that are issued and outstanding immediately prior to the Effective Time, expressed on a fully-diluted and as-converted to Channel common stock basis, calculated using the treasury stock method and assuming, without |

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duplication, (i) the acceleration and exercise of all Channel stock options and Channel warrants outstanding as of immediately prior to the Effective Time with an exercise price less than the Channel closing price, and (ii) the conversion of all Channel preferred stock outstanding as of immediately prior to the Effective Time (on an as-converted to Channel common stock basis). For the avoidance of doubt, (A) no Channel stock options that are (x) unvested and outstanding as of immediately prior to the Effective Time or (y) vested and outstanding as of immediately prior to the Effective Time with an exercise price equal to or greater than the Channel closing price shall be included in the total number of shares of Channel common stock outstanding for purposes of determining the Channel outstanding shares, and (B) other than with respect to Channel common stock underlying vested outstanding Channel stock options and Channel warrants with an exercise price less than the Channel closing price, shares of Channel common stock reserved for issuance under the Channel stock plans as of immediately prior to the Effective Time shall not be included in the total number of shares of Channel common stock outstanding for purposes of determining the Channel outstanding shares;

| • | “Channel valuation” means $15,000,000; |

| • | “LNHC allocation percentage” means the quotient determined by dividing (i) the LNHC valuation by (ii