Company: PTHS
Filing Date: 2025-05-13
Form Type: 10-Q
Source: 0001753926-25-000790
Chunk: 20

Company: Pelthos Therapeutics Inc.
Filing Date: 2025-05-13
Form: 10-Q
Item: Part I, Item 1
Chunk 20
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 ended March 31, 2025 and 2024, the Company granted no stock options related to the Company’s common
stock. 

With
certain adjustments outlined below, the Company based its determination of the underlying fair value of the Company’s Common
Stock on the findings of an independent third party engaged by the Company to determine the fair value of the Company’s
intellectual property. The Company had the analysis conducted in conjunction with the Contribution Agreement, which was executed
on August 10, 2022. The analysis determined that the fair value of the Company’s intellectual property was $44.8 million.
At the time of the Contribution Agreement and the option grants, there was 1,187,302 shares (on an as converted basis
reflecting the conversion of the 600,000 Series A Convertible Preferred Stock held by Chromocell Holdings). As of March
31, 2025, all of the Series A Convertible Preferred Stock shares have been converted. The resulting value per share of common
stock was $37.71. The Company then adjusted this value in accordance with the following:

 Schedule of of Servicing Assets at Fair Value

    Value
    of intellectual property
     
    $
    44.8 million

    Common
    shares outstanding (as converted)

    1,187,302

    Value
    per common share
     
    $
    37.71

    Illiquidity
    discount

    20
    %

    Minority
    discount

    20
    %

    Fair
    value of the common stock
     
    $
    22.68

    15

After
the completion of the Company’s IPO, the trading price of the Company’s Common Stock is used as the fair value of
the Company’s Common Stock.

The
Company determined the expected volatility assumption for options granted using the historical volatility of comparable public
companies’ common stock. The Company will continue to monitor peer companies and other relevant factors used to measure
expected volatility for future option grants, until such time that the Company’s Common Stock has enough market history
to use historical volatility.

The
dividend yield assumption for options granted is based on the Company’s history and expectation of dividend payouts. The
Company has never declared nor paid any cash dividends on its Common Stock, and the Company does not anticipate paying any cash
dividends in the foreseeable future.

The
Company recognizes option forfeitures as