Company: PTHS
Filing Date: 2025-05-27
Form Type: DEFM14C
Source: 0001140361-25-020509
Chunk: 548

Company: Pelthos Therapeutics Inc.
Filing Date: 2025-05-27
Form: DEFM14C
Chunk 548
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 Accounting Policies**

#### Basis of Presentation
Unless the context otherwise requires, “LNHC” or the “Company”, refers to LNHC, Inc. The Company’s condensed financial statements have been prepared on a stand-alone basis, in conformity with United States generally accepted accounting principles (“U.S. GAAP”).

#### Parent Company Net Investment
The Company is under the control of Ligand (commonly referred to as “Parent” or “Parent Company”). Accordingly, the Parent Company net investment in the Company is shown in lieu of stockholder’s equity in the condensed financial statements. All significant intercompany transactions with the Parent Company are deemed to have been paid in the period the costs were incurred. Expenses related to corporate allocations are considered to be effectively settled for cash in the condensed financial statements at the time the transaction was recorded.

#### Corporate Allocations
The condensed financial statements include all revenues, expenses, assets and liabilities directly associated with the Company’s business activity, as well as an allocation of certain general and administrative expenses related to facilities, functions and services provided by the Parent.

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#### TABLE OF CONTENTS
Corporate expenses have been allocated to the Company based on a relative usage of (benefit from) certain corporate divisions, or specific corporate employees, in the Company’s business. Management believes that methodology applied to the Company corporate expenses allocations are reasonable and consistent across the Company’s reporting periods.

All of the allocations and estimates in the condensed financial statements are based on assumptions that management believes are reasonable. However, the condensed financial statements included herein may not be indicative of the financial position, results of operations and cash flows of the Company in the future or if the Company had been a separate, stand-alone publicly traded entity during the periods presented.

### Liquidity and Capital Resources
Since the Novan Acquisition, LNHC was dependent upon Ligand for all of its working capital and financing requirements, as Ligand uses a centralized approach for cash management and financing its operations. There were no cash amounts specifically attributable to LNHC for the historical periods presented; therefore, there is no cash reflected in the condensed financial statements. Accordingly, cash and cash equivalents have not been allocated to LNHC in the condensed financial statements. Financing transactions related to LNHC are accounted for as a component of net Parent investment in the condensed balance sheets and as a financing activity including an interest expense component allocation on the accompanying condensed statements of cash flows.

LNHC expects to continue to incur losses for the foreseeable future, as it continues to invest in commercialization