Company: PTHS
Filing Date: 2025-08-13
Form Type: 10-Q
Source: 0001753926-25-001326
Chunk: 101

Company: Pelthos Therapeutics Inc.
Filing Date: 2025-08-13
Form: 10-Q
Item: Part I, Item 8
Chunk 101
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 (each, a “Side
Letter”) with the Company, pursuant to which, immediately after the closing of the PIPE Financing on July 1, 2025, the PIPE
Investors converted 23,810 shares of Series A Preferred Stock not exceeding such PIPE Investors’ Maximum Percentage into
an aggregate of 2,381,000 shares of the Company’s Common Stock (after giving effect to the Reverse Stock Split), by providing
the Company with a completed and signed Conversion Notice under the Certificate of Designation.

Options

During
the three months ended June 30, 2025 and 2024, the Company granted 7,899 and 63,400 stock options related to the Company’s
common stock, respectively. 

During
the six months ended June 30, 2025 and 2024, the Company granted 7,899 and 63,400 stock options related to the Company’s
common stock, respectively. 

With
certain adjustments outlined below, the Company based its determination of the underlying fair value of the Company’s Common
Stock on the findings of an independent third party engaged by the Company to determine the fair value of the Company’s
intellectual property. The Company had the analysis conducted in conjunction with the Contribution Agreement, which was executed
on August 10, 2022. The analysis determined that the fair value of the Company’s intellectual property was $44.8 million.
At the time of the Contribution Agreement and the option grants, there were 118,731 shares (on an as converted basis
reflecting the conversion of the 600,000 Series A Convertible Preferred Stock held by Chromocell Holdings). The Series
A Convertible Preferred Stock was converted into common stock with the consummation of the IPO and as of June 30, 2025, all of
the Series A Convertible Preferred Stock shares have been converted. The resulting value per share of common stock was $377.10.
The Company then adjusted this value in accordance with the following:

 Schedule of of Servicing Assets at Fair Value

    Value
    of intellectual property
     
    $
    44.8 million

    Common shares outstanding
    (as converted)

    118,731

    Value per common
    share
     
    $
    377.10

    Illiquidity discount

    20
    %

    Minority discount

    20
    %

    Fair value of the