Company: PTHS
Filing Date: 2025-05-09
Form Type: PREM14C
Source: 0001140361-25-018219
Chunk: 523

Company: Pelthos Therapeutics Inc.
Filing Date: 2025-05-09
Form: PREM14C
Chunk 523
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, add operational, financial and management information systems and personnel to support Company operations and incur additional costs associated with operating as a public company. LNHC’s ability to continue its operations is dependent upon our ability to obtain additional capital in the future and generate cash flows from operations. Funding from Ligand is the primary source of LNHC's liquidity and Ligand has both the intent and ability to provide such funding to support our operations through at least 12 months following the issuance date of the financial statements.

The accompanying financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

#### Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from these estimates.

#### Inventory
The Company measures inventory using the first-in, first-out method and values inventory at the lower of cost or net realizable value. Inventory value includes amounts related to materials, manufacturing labor and overheads. The Company performs an analysis and records a provision for potentially obsolete inventory. The reserve for obsolescence is generally an estimate of the amount of inventory held at period end that is expected to expire in the future based on projected sales volume and expected product expiration or sell-by dates. These assumptions require the Company to analyze the aging of and forecasted demand for its inventory and make estimates regarding future product sales.

Prior to obtaining initial regulatory approval for ZELSUVMI, the Company expensed costs relating to production of pre-launch inventory as research and development expense in its statements of operations in the period incurred. Inventory acquired and the related costs after January 5, 2024, the date of the FDA’s approval of ZELSUVMI, are capitalized. As of December 31, 2024, the amount of LNHC inventory consisted of $3,923 work-in-progress and $603 raw materials. Products used in clinical trials are expensed as research and development expense in the statements of operations.

Additionally, the Company’s product is subject to strict quality control and monitoring that is performed throughout the manufacturing process, including release of work-in-process to finished goods. In the event that

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certain batches or units of product do not meet quality specifications, the Company records a write-down