Company: PTHS
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001753926-25-000503
Chunk: 1287

Company: Pelthos Therapeutics Inc.
Filing Date: 2025-03-27
Form: 10-K
Item: Item 6
Chunk 1287
---
 of 684,000 stock options related to the Company’s
common stock. These stock options had a life of 10 years and an exercise price of $1.30 or $0.73 per option. During
the year ended December 31, 2023, the Company granted a total of 158,670 stock options. These stock options had a life
of 10 years and an exercise price of $22.68 per option.

During
the years ended December 31, 2024 and 2023, the fair value of each stock option granted was estimated using the Black-Scholes
Option Pricing Model using the following inputs:

 Schedule
of fair value of each stock option granted

    For
    the Year 
Ended 
December 31, 2024

    For
    the Year 
Ended 
December 31, 2023

    Exercise price
     
    $
    0.73-1.30

    $
    22.68

    Expected dividend yield

    0
    %

    0
    %

    Risk free interest rate

    4.20
    %

    3.50-3.93
    %

    Expected life in years

    10

    10

    Expected volatility

    196-201
    %

    157-158
    %

    F-22 

The
risk-free interest rate assumption for options granted is based upon observed interest rates on the United States Government Bond
Equivalent Yield appropriate for the expected term of the options.

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 was 1,187,302 shares (on an as converted basis
reflecting the conversion of the 600,000 Series A Convertible Preferred Stock held by Chromocell Holdings). As of December
31, 2024, all of the Series A Convertible Preferred Stock shares have been converted. The resulting value per share of common