Company: PTHS
Filing Date: 2025-11-13
Form Type: 10-Q
Source: 0001753926-25-001764
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Company: Pelthos Therapeutics Inc.
Filing Date: 2025-11-13
Form: 10-Q
Item: Part I, Item 1
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    September 30, 2025 Effective Annual Discount Rate 
     25.6% 
     30.3% 

NOTE
9 - LEASES

As
described in Note 1 — “Organization and Description of Business”, the Company's wholly owned subsidiary, LNHC,
was formed in September 2023 to execute the Ligand acquisition of certain assets and liabilities from Novan in a 363 transaction.
Per the 363 transaction, certain Novan agreements were assumed by LNHC and as of the Merger as of July 1, 2025, LNHC had certain
rights and obligations related to its manufacturing facility and the related lease described below.

On
January 18, 2021, the Company entered into a lease with an initial term expiring in 2032, as amended for 19,265 rentable
square feet, located in Durham, North Carolina. This lease dated as of January 18, 2021, as amended (the “TBC Lease”),
is by and between the Company and Copper II 2020, LLC (the “TBC Landlord”), pursuant to which the Company is leasing
space serving as its corporate headquarters and primary API manufacturing site (the “Premises”) located within the
Triangle Business Center. The lease executed on January 18, 2021, as amended, was further amended on November 23, 2021
to expand the Premises by approximately 3,642 additional rentable square feet from 15,623 rentable square feet.

    31

The
TBC Lease commenced on January 18, 2021 (the “Lease Commencement Date”). Rent under the TBC Lease commenced in
October 2021 (the “Rent Commencement Date”). The term of the TBC Lease expires on the last day of the one hundred
twenty-third calendar month after the Rent Commencement Date. The TBC Lease provides the Company with one option to extend the
term of the TBC Lease for a period of 5 years, which would commence upon the expiration of the original term of the TBC Lease,
with base rent of a market rate determined according to the TBC Lease; however, the renewal period was not included in the calculation
of the lease obligation as the Company determined it was not reasonably certain to exercise the renewal option.

The
monthly base rent for the Premises is approximately $39 for months 1-10 and approximately $49 for months