Company: PTHS
Filing Date: 2025-05-27
Form Type: DEFM14C
Source: 0001140361-25-020509
Chunk: 281

Company: Pelthos Therapeutics Inc.
Filing Date: 2025-05-27
Form: DEFM14C
Chunk 281
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 trading volatility often associated with low-priced stocks, many brokerage houses and institutional investors have internal policies and practices that either prohibit them from investing in low-priced stocks or tend to discourage individual brokers from recommending low-priced stocks to their customers. Some of those policies and practices may function to make the processing of trades in low-priced stocks economically unattractive to brokers. Additionally, because brokers’ commissions on low-priced stocks generally represent a higher percentage of the stock price than commissions on higher-priced stocks, the current average price per share of Channel common stock can result in individual stockholders paying transaction costs representing a higher percentage of their total share value than would be the case if the share price were substantially higher. It should be noted, however, that the liquidity of the Channel common stock may in fact be adversely affected by the Reverse Stock Split given the reduced number of shares of Channel common stock that would be outstanding after the Reverse Stock Split.

#### Risks of the Reverse Stock Split
Channel cannot assure you that the Reverse Stock Split will increase its stock price and have the desired effect of compliance with the Minimum Price and other NYSE American Requirements. The Channel board of directors expects that the Reverse Stock Split, if the Channel board of directors deems it necessary, will increase the market price of Channel common stock so that Channel is able to comply with the minimum price, minimum stockholders’ equity, public float and other NYSE American initial listing requirements. However, the effect of the Reverse Stock Split upon these requirements of Channel common stock cannot be predicted with any certainty, and the history of similar reverse stock splits for companies in like circumstances is varied.

It is possible that the per share price of Channel common stock after the Reverse Stock Split will not rise in proportion to the reduction in the number of shares of Channel common stock outstanding resulting from the Reverse Stock Split, and the market price per post-Reverse Stock Split share may not exceed or remain in excess of the $1.00 minimum bid price for a sustained period of time, and the Reverse Stock Split may not result in a per share price that would attract brokers and investors who do not trade in lower priced stocks.

Even if Channel effects the Reverse Stock Split, the market price of Channel common stock may decrease due to factors unrelated to the Reverse Stock Split. In any case, the market price of Channel common stock may also be based on other factors which may be unrelated to the number of shares outstanding, including Channel’s future

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performance. If the Reverse Stock Split is