Company: PTHS
Filing Date: 2025-08-13
Form Type: 10-Q
Source: 0001753926-25-001326
Chunk: 185

Company: Pelthos Therapeutics Inc.
Filing Date: 2025-08-13
Form: 10-Q
Item: Part I, Item 2
Chunk 185
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 Investors were not registered under the Securities Act and
were issued and sold in reliance on the exemption from registration requirements thereof provided by Section 4(a)(2) of the Securities
Act as a transaction by an issuer not involving a public offering.

The
closing of the PIPE Financing occurred on July 1, 2025, immediately prior to the consummation of the Merger

On
July 1, 2025, certain PIPE Investors entered into Series A Convertible Preferred Stockholder Side Letters with the Company, pursuant
to which, immediately after the closing of the PIPE Financing on July 1, 2025, the PIPE Investors converted 23,810 shares of Series
A Preferred Stock not exceeding such PIPE Investors’ Maximum Percentage into an aggregate of 2,381,000 shares of the Company’s
Common Stock (after giving effect to the Reverse Stock Split), by providing the Company with a completed and signed Conversion
Notice under the Certificate of Designation.

Future
Funding Requirements

Our
primary use of cash is to fund clinical development, operating expenses and repay accrued liabilities associated with our IPO
and prior operating expenses.

With
respect to the Company’s future expected operations expenses, the primary expense drivers will be research and development
and management overhead, including costs of being a public company. Of these, research and development is a significant expense
which has been utilized for the furtherance of the Company’s CC8464, CT2000 and CT3000 programs. We have based the research
and development costs on current clinical and pre-clinical trial parameters and expectations on certain existing tax credits,
and there is no certainty that the clinical and pre-clinical trial parameters or tax credits available to the Company will remain
as they are, which could lead to changes in our research and development expenditures. Cash used to fund operating expenses is
impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable, accrued
expenses and prepaid expenses.

We
expect to continue to incur significant and increasing expenses and operating losses in connection with our ongoing research and
development activities. As a result, we expect to continue to incur operating losses and negative operating cash flows for the
foreseeable future.

As
a result, we will need to raise additional funding through strategic relationships, public or private equity or debt financings,
credit facilities, grants or other arrangements or some combination thereof. If such funding is not available or not available
on terms acceptable to us, our