Company: PTHS
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001753926-25-000503
Chunk: 299

Company: Pelthos Therapeutics Inc.
Filing Date: 2025-03-27
Form: 10-K
Item: Item 1A
Chunk 299
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 be subject to events of default which in turn
would materially and adversely affect our business, financial condition, and results of operations and our liquidity.

The
terms of the CEF Purchase Agreement limit the amount of shares of Common Stock we may issue to Tikkun, which may have an adverse
effect on our liquidity.

The
CEF Purchase Agreement includes restrictions on our ability to sell shares of our Common Stock to Tikkun, including, subject to
specified limitations, if a sale would cause Tikkun and its affiliates to beneficially own more than the Beneficial Ownership
Limit. Accordingly, we cannot guarantee that we will be able to sell all $30.0 million of shares of Common Stock under the CEF
Purchase Agreement. If we cannot sell the full amount of the shares that Tikkun has committed to purchase because of these limitations,
we may be required to utilize more costly and time-consuming means of accessing the capital markets, which could materially adversely
affect our liquidity and cash position.

Future
sales of substantial amounts of our Common Stock, or the possibility that such sales could occur, could adversely affect the market
price of our Common Stock.

In
order to raise additional capital, we may in the future offer additional shares of our Common Stock or other securities convertible
into or exchangeable for our Common Stock. Investors purchasing shares or other securities in the future could have rights superior
to existing shareholders. The price per share at which we sell additional shares of our Common Stock, or securities convertible
or exchangeable into common stock, in future transactions may be higher or lower than the price per share paid by investors in
previous offerings by us.

Management
will have broad discretion as to the use of the proceeds from our sale of Purchase Shares to Tikkun under the CEF Purchase Agreement,
and such uses may not improve our financial condition or market value.

Because
we have not designated the amount of net proceeds from our sale to Tikkun of Purchase Shares to be used for any particular purpose,
our management will have broad discretion as to the application of such net proceeds. Our management may use the net proceeds
for corporate purposes that may not improve our financial condition or advance our business objectives.

64 

Item
1B. Unresolved Staff Comments.

None.

Item
1C. Cybersecurity

Risk
management and strategy

We
are an R&D stage pharmaceutical company, with no commercial operations or revenue streams. Since our IPO, our sole business
activity has been ongoing research into our drug therapies