Company: PTHS
Filing Date: 2025-11-14
Form Type: PRE 14A
Source: 0001753926-25-001803
Chunk: 61

Company: Pelthos Therapeutics Inc.
Filing Date: 2025-11-14
Form: PRE 14A
Chunk 61
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 Stock that would be issued to any holder or any of their affiliates would exceed the number of shares equal to 19.99% of
the number of shares of Common Stock issued and outstanding immediately prior to the date of issuance (the number of shares which
may be issued without violating such rules and regulations, the “Exchange Cap”).

Convertible Note Financing

On November 6,
2025, the Company entered into the November 2025 Securities Purchase Agreement with the Investors pursuant to which, among other
things, on the such date, the Investors purchased for cash, and the Company issued and sold to the Investors, the Convertible Notes
in the aggregate original principal amount of $18.0 million, which are convertible into shares of Common Stock, in the Convertible
Note Financing. The gross proceeds from the Convertible Note Financing were approximately $18.0 million, before paying estimated
expenses. The November 2025 Securities Purchase Agreement contained customary representations and warranties of the Company, on
the one hand, and the Investors, on the other hand, and customary conditions to closing. The November 2025 Securities Purchase
Agreement generally prohibits the Company from issuing securities without the written consent of the Required Holders (as defined
in the November 2025 Securities Purchase Agreement), but includes exceptions for specific issuances of securities, including in
connection with the independent funding and development of the Company’s historical assets relating to the sodium-ion channel
known as NaV1.7 for the treatment of various types of systemic chronic pain, acute and chronic eye pain and post-surgical nerve
blocks. The Investors have approved Ligand to serve as the Collateral Agent under the Pledge Agreement (as defined in the November 2025 Securities Purchase Agreement) and the other Security Documents (as defined in the November 2025 Securities Purchase Agreement) and have authorized the Collateral Agent to take action on behalf of the Investors in accordance with the terms of the November 2025 Securities Purchase Agreement and the related security documents. The Convertible Note Financing was approved by the vote of the disinterested directors of the Board.

The Convertible
Notes rank senior to current and future indebtedness of the Company and its subsidiaries, excluding (i) any credit facility with one
or more financial institutions in form and substance reasonably satisfactory to the Required Holders and with an aggregate amount of
indebtedness that does not exceed $50.0 million or (ii) an asset-based loan facility that does not exceed $10.0 million,