Company: PTHS
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001753926-25-000503
Chunk: 11

Company: Pelthos Therapeutics Inc.
Filing Date: 2025-03-27
Form: 10-K
Item: Item 1
Chunk 11
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man, who is the Bridget M. Flaherty Professor of
Neurology and of Neuroscience and the Director of the Center for Neuroscience and Regeneration Medicine at Yale University School
of Medicine.

Legal
Proceedings

From
time to time, we may be involved in legal proceedings arising in the ordinary course of our business. We are not presently a party
to any legal proceedings that, in the opinion of management, would have a material adverse effect on our business. Regardless
of outcome, litigation can have an adverse impact on us due to defense and settlement costs, diversion of management resources,
negative publicity and reputation harm, and other factors.

Demand
Letter from Mr. Kopfli’s Attorney

On
February 14, 2024, our Board received a demand letter from an attorney representing Chromocell Holdings and our former Chief Executive
Officer and former Chief Strategy Officer, Mr. Christian Kopfli, who was released for “cause” as disclosed elsewhere
in this Report. Mr. Kopfli alleged an improper termination for “cause” and claimed to seek monetary damages in the
amount of $479,169. Of the $479,169 asserted by Mr. Kopfli, as of September 30, 2024,
the Company had accrued $363,091 in compensation expenses associated with Mr. Kopfli’s prior employment with the Company.
However, the Company believed the assertions made by Mr. Kopfli were without merit and commenced a lawsuit against Mr. Kopfli
and Chromocell Holdings in the Supreme Court for the State of New York, County of New
York on June 7, 2024 (Index No. 652917/2024, the “New York Action”), asserting causes of action against Mr.
Kopfli for breach of the Employment Agreement entered into on January 10, 2023 between the Company and Mr. Kopfli, breach of fiduciary
duty by Mr. Kopfli, as well as breach of contract against Chromocell Holdings. The Company also asserted a “faithless servant”
claim against Mr. Kopfli, seeking a ruling that Mr. Kopfli was not entitled to compensation from the Company. The Company sought
monetary damages against Mr. Kopfli and Chromocell Holdings in the New York Action, plus disgorgement of all compensation previously
paid or accrued to Mr. Kopfli by the Company.

7 

By
Order dated October