Company: PTHS
Filing Date: 2025-05-27
Form Type: DEFM14C
Source: 0001140361-25-020509
Chunk: 37

Company: Pelthos Therapeutics Inc.
Filing Date: 2025-05-27
Form: DEFM14C
Chunk 37
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 documents incorporated by reference into this information statement.

#### Risks Related to the Transactions
**The exchange ratio will not be adjusted based on the market price of Channel common stock, so the merger consideration at the closing may have a greater or lesser value than at the time the Merger Agreement was signed.

At the Effective Time, outstanding shares of LNHC capital stock will be converted into shares of Channel Series A Preferred Stock equal to the exchange ratio described in more detail in the section titled “ The Merger-Exchange Ratio ” beginning on page 125 of this information statement. The exchange ratio represents the number of shares of Channel common stock issuable upon conversion of the Channel Series A Preferred Stock that will be received for each LNHC share outstanding in the Merger and is based on a stipulated value for Channel of $15 million (excluding the PIPE Financing) and for LNHC of $67 million. Based on Channel’s and LNHC’s capitalization as of May 23, 2025, Ligand is expected to receive an aggregate of approximately 31,253.76 shares of Channel Series A Preferred Stock in the Merger. This amount is an estimate only and the final number of shares Ligand will receive at closing will be determined pursuant to a formula described in more detail in the Merger Agreement.

Immediately following the Transactions, the Channel securityholders as of immediately prior to the Merger are expected to hold approximately 7.9% of the shares of combined company capital stock, Ligand, including its participation in the PIPE Financing, is expected to hold approximately 55.7% of the shares of combined company capital stock, and the other PIPE Investors are expected to hold approximately 36.3% of the shares of combined company capital stock, in each case, on a fully diluted basis, subject to certain assumptions.

Any changes in the market price of Channel stock before the completion of the Merger will not affect the number of shares Ligand will be entitled to receive pursuant to the Merger Agreement. Therefore, if before the completion of the Merger, the market price of Channel common stock increases from the market price on the date of the Merger Agreement, then Ligand could receive merger consideration with substantially more value for their shares of LNHC capital stock than the parties had negotiated when they established the exchange ratio. Similarly, if before the completion of the Merger the market price of Channel common stock declines from the market price on the date of the Merger Agreement, then Ligand could receive merger consideration with substantially lower value. The