Company: PTHS
Filing Date: 2025-05-27
Form Type: DEFM14C
Source: 0001140361-25-020509
Chunk: 539

Company: Pelthos Therapeutics Inc.
Filing Date: 2025-05-27
Form: DEFM14C
Chunk 539
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73 per option. During the year ended December 31, 2023, the Company granted a total of 158,670 stock options. These stock options had a life of 10 years and an exercise price of $22.68 per option.

<div align='center'>F-42</div>

TABLE OF CONTENTS

During the years ended December 31, 2024 and 2023, the fair value of each stock option granted was estimated using the Black-Scholes Option Pricing Model using the following inputs:

|                         |     |      For the Year 
             Ended 
 December 31, 2024 |     |      For the Year 
             Ended 
 December 31, 2023 |
|:------------------------|:----|------------------:|:----|------------------:|
| Exercise price          |     |        $0.73-1.30 |     |            $22.68 |
| Expected dividend yield |     |                0% |     |                0% |
| Risk free interest rate |     |             4.20% |     |        3.50-3.93% |
| Expected life in years  |     |                10 |     |                10 |
| Expected volatility     |     |          196-201% |     |          157-158% |

The risk-free interest rate assumption for options granted is based upon observed interest rates on the United States Government Bond Equivalent Yield appropriate for the expected term of the options. 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 December 31, 2024, 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:

| Value of intellectual property           |     | $44