Company: PTHS
Filing Date: 2025-08-13
Form Type: 10-Q
Source: 0001753926-25-001326
Chunk: 23

Company: Pelthos Therapeutics Inc.
Filing Date: 2025-08-13
Form: 10-Q
Item: Part I, Item 1
Chunk 23
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 and certain investors, which includes Ligand (collectively, the “PIPE Investors”), pursuant
to which, among other things, on the Closing Date and immediately prior to the consummation of the Merger, the PIPE Investors
purchased (either for cash or in exchange for the conversion of principal and interest payable under an outstanding convertible
note issued by the Company), and the Company issued and sold to the PIPE Investors, an aggregate of 50,100 shares of the Company’s
Series A Convertible Preferred Stock, par value $0.0001 per share (the “Series A Preferred Stock”) at a price per
share equal to $1,000 (such transaction, the “PIPE Financing”). The gross proceeds from the PIPE Financing were approximately
$50.1 million, consisting of approximately $50.0 million in cash and the conversion of approximately $0.1 million of principal
and interest payable under an outstanding convertible note issued by the Company, before paying estimated expenses. The Securities
Purchase Agreement contained customary representations and warranties of the Company and LNHC, on the one hand, and the PIPE Investors,
on the other hand, and customary conditions to closing.

On
July 1, 2025, the Company, LNHC and the PIPE Investors entered into Amendment No. 1 to Securities Purchase Agreement, pursuant
to which, the Company, LNHC and the PIPE Investors consented to the inclusion of two additional PIPE Investors in the PIPE Financing
and a corresponding decrease in the amount of certain PIPE Investors’ investments in the PIPE Financing such that the aggregate
amount of the PIPE Financing would remain unchanged (the “Securities Purchase Agreement Amendment”).

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Each
share of Series A Preferred Stock is convertible at any time at the holder’s option into a number of shares of Common Stock,
par value $0.0001 per share equal to (i) $1,000, subject to adjustment, plus any all declared and unpaid dividends thereon as
of such date of determination, plus any other amounts owed to such holder pursuant to the Certificate of Designations of Rights
and Preferences of Series A Convertible Preferred Stock (the “Certificate of Designations”), divided by (ii) $1 (adjusted
to $10 as a result of the ten-for-one Reverse Stock Split), subject to adjustments.

In
general, a holder of shares of Series A Preferred Stock may not convert any portion of Series A Preferred Stock if the holder,
together with its affiliates, would beneficially own