Company: PTHS
Filing Date: 2025-11-13
Form Type: 10-Q
Source: 0001753926-25-001764
Chunk: 117

Company: Pelthos Therapeutics Inc.
Filing Date: 2025-11-13
Form: 10-Q
Item: Part I, Item 1
Chunk 117
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 for the State of New York, County of New York on June
7, 2024 (Index No. 652917/2024, the “New York Action”), asserting causes of action against Mr. Kopfli for breach of
the Employment Agreement entered into on January 10, 2023 between Chromocell and Mr. Kopfli, breach of fiduciary duty by Mr. Kopfli,
as well as breach of contract against Chromocell Holdings. Chromocell also asserted a “faithless servant” claim against
Mr. Kopfli, seeking a ruling that Mr. Kopfli was not entitled to compensation from Chromocell. Chromocell sought monetary damages
against Mr. Kopfli and Chromocell Holdings in the New York Action, plus disgorgement of all compensation previously paid or accrued
to Mr. Kopfli by Chromocell.

By Order dated October 3, 2024, the court
in the New York Action awarded Chromocell a default judgment against Mr. Kopfli and Chromocell Holdings on all claims. On October
7, 2025, following an inquest held before 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