Company: PTHS
Filing Date: 2025-11-13
Form Type: 10-Q
Source: 0001753926-25-001764
Chunk: 158

Company: Pelthos Therapeutics Inc.
Filing Date: 2025-11-13
Form: 10-Q
Item: Part II, Item 1
Chunk 158
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 the Court regarding Chromocell’s damages, a judgment was entered in favor of Chromocell
and against Mr. Kopfli and Chromocell Holdings, jointly and severally, in the amount of $17,950,810, as well as additional damages
against Mr. Kopfli in the amount of $348,461. As of June 30, 2025, the Company has removed the accrual of $348,461 in compensation
expenses.

Lang Demand Letter

On July 24, 2025, the Company received
a demand latter (the “Lang Demand Letter”) from an attorney representing Dr. Eric Lang, the former Chief Medical Officer
of the Company. The Lang Demand Letter asserts that the Company breached Dr. Lang’s employment contract with the Company
and violated Dr. Lang’s rights under New Jersey wage and hour laws and the federal Consolidated Omnibus Budget Reconciliation
Act. The Lang Demand Letter asserts potential liability of as much as $1,008,095, an amount that includes liquidated damages of
$640,000 that the Company believes are unavailable under applicable law. The Company has settled the matter without payment of
any liquidated damages. The Company believes that this matter has been full resolved.

Item 1A. Risk Factors

As a smaller reporting company, the Company
is not required to include the disclosure required under this Item 1A.

Item 2. Unregistered Sales of Equity
Securities and Use of Proceeds

Recent Sales of Unregistered Securities

In
conjunction with the consummation of the Merger, the Company closed the PIPE Financing pursuant to the Securities Purchase Agreement
executed concurrently with the Merger Agreement, by and among the Company, and the PIPE Investors. At the closing of the PIPE Financing,
which occurred immediately prior to the Effective Time, the Company issued an aggregate of 50,100 shares of Series A Preferred
Stock to the PIPE Investors for gross proceeds of approximately $50.1 million, consisting of approximately $50.0 million in cash
and the conversion of approximately $0.1 million of principal and interest under an outstanding convertible note.

Each
share of Series A Preferred Stock is convertible into shares Common Stock, subject to certain beneficial ownership limitations,
including a 49.9% cap for Ligand and a 4.99% cap for other PIPE Investors. Immediately following the PIPE Financing, certain PIPE
Investors converted 23,810 shares of Series A Preferred Stock into an aggregate of