Company: PTHS
Filing Date: 2025-08-13
Form Type: 10-Q
Source: 0001753926-25-001326
Chunk: 82

Company: Pelthos Therapeutics Inc.
Filing Date: 2025-08-13
Form: 10-Q
Item: Part I, Item 8
Chunk 82
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the Company (the “Merger”), (ii) Channel’s name was changed from Channel Therapeutics Corporation to Pelthos
Therapeutics Inc. (“Pelthos” or the “Company”) and (iii) the Company effected a 10-for-1 reverse stock
split of all outstanding shares of its Common Stock (the “Reverse Stock Split”).

The
Common Stock share amounts included in these Notes to the Company’s financials are presented on a post-split basis and reflect
the Reverse Split.

NOTE
2 – LIQUIDITY AND GOING CONCERN

A
fundamental principle of the preparation of financial statements in accordance with GAAP is the assumption that an entity will
continue in existence as a going concern, which contemplates continuity of operations and the realization of assets and settlement
of liabilities occurring in the ordinary course of business. In accordance with this requirement, the Company has prepared its
accompanying consolidated financial statements assuming the Company will continue as a going concern.

During
the three and six months ended June 30, 2025, the Company had a net loss of approximately $3.5 million and $5.4 million,
respectively. As of June 30, 2025, the Company has cash of approximately $0.1 million and a working capital deficit $6.5 million.

Based
on the Company’s current projections, management believes there is substantial doubt about its ability to continue to
operate as a going concern and fund its operations through at least the next twelve months following the issuance of these
condensed consolidated financial statements. While the Company completed an equity offering of $50.1 million
subsequent to the end of the reporting period, the Company expects that costs
associated with the commercial launch of Zelsuvmi (acquired pursuant to the Merger), the potential acquisition of a second
FDA approved product and costs related to potential clinical trials associated with the existing pain programs will require the
Company to raise additional funds. However, there is no assurance that
the Company will be able to raise such additional funds on acceptable terms, if at all. If the Company raises additional
funds by issuing securities, existing stockholders may be diluted.

The
condensed consolidated financial
statements included in this report do not include any adjustments to reflect the possible future effects on the recoverability
and classification of assets or the amounts and classification of liabilities that may result from the matters discussed herein.
While the Company believes in the