Company: PTHS
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001753926-25-000503
Chunk: 2139

Company: Pelthos Therapeutics Inc.
Filing Date: 2025-03-27
Form: 10-K
Item: Item 11
Chunk 2139
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 Formulations and we will purchase the Spray Formulations exclusively
from Benuvia, pursuant to the Benuvia Supply Agreement. The initial sale price per unit for each Spray Formulation payable by
us to Benuvia pursuant to the Benuvia Supply Agreement shall be subject to good faith negotiations; provided that the initial
price for each Spray Formulation and the price for each Spray Formulation during the term of the Benuvia License Agreement in
no event shall be less than Benuvia’s cost of manufacturing the respective Spray Formulation plus a gross margin to Benuvia.
The price for each Spray Formulation shall be subject to an annual increase in amounts equal to the percentage change in the Producer
Price Index, Pharmaceutical Preparations as published by the U.S. Department of Labor, Bureau of Labor Statistics.

Under
the terms of the Benuvia License Agreement, we obtained exclusive, worldwide rights to develop, commercialize and distribute the
Spray Formulations. In connection with the Benuvia License Agreement, we agreed to pay Benuvia a six and one-half percent (6.5%)
royalty on net sales of the Spray Formulations for a period of up to 15 years from the date of the first commercial sale of the
Spray Formulations. To date, we have paid $0 to Benuvia as royalty on net sales of the Spray Formulations. Pursuant to the Benuvia
Stock Issuance Agreement, we issued to Benuvia 384,226 shares of our Common Stock, which may be offered and sold pursuant to the
Resale Prospectus. Benuvia will be responsible for the manufacturing and supply of the Spray Formulations, which is capped not
to exceed a specific gross margin for Benuvia, and we have a most favored nation rate on development and regulatory services.

Under
the Benuvia License Agreement, we will have exclusive, worldwide rights to develop, commercialize and distribute the Spray Formulations.
Further, we have the right to request a bid from a third party to manufacture the Spray Formulations once each year.

The
Benuvia License Agreement contains standard termination provisions. The Benuvia License Agreement may be terminated in its entirety,
on a Spray Formulation by Spray Formulation basis, and by country by county for a material breach not cured within sixty (60)
days after written notice thereof. If we breach any of our payment obligations under the terms of the Benuvia License Agreement
that are not the subject