Company: PTHS
Filing Date: 2025-11-13
Form Type: 10-Q
Source: 0001753926-25-001764
Chunk: 92

Company: Pelthos Therapeutics Inc.
Filing Date: 2025-11-13
Form: 10-Q
Item: Part I, Item 1
Chunk 92
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of Intangible Assets Expense

The
amortization of intangibles is related to Company's purchase accounting of LNHC associated with the Merger upon which the Company
recognized intangible assets for (i) the rights it has to make, use and sell ZELSUVMI; and (ii) the Sato Agreement. These assets
are being amortized on a straight-line basis over the lesser of the term of the agreement and the useful life of the license.
For the three and nine months ended September 30, 2025, respectively, amortization of intangible assets was $0.7 million. For
more information, see Note 4 — “Balance Sheet Account Details” in the notes to our condensed consolidated financial
statements.

Interest
Expense

Interest
expense is primarily attributable to the Reedy Creek Purchase Agreement, the ZELSUVMI Royalty Agreement, and the Channel Products
Royalty Agreement. These agreements are accounted for under the effective interest method with non-cash interest expense added
to the amount of liability on a quarterly basis. For more information, see Note 7 — “Reedy Creek Liability”
and Note 8 “License and Other Agreements” in the notes to our condensed consolidated financial statements.

The
following table summarizes our interest expense for the three and nine months ended September 30, 2025 and 2024 (in thousands):

    For
    the Three months Ended September 30,  
    Change  
    For
    the Nine months Ended September 30,  
    Change 

    2025  
    2024  
    $  
    2025  
    2024  
    $ 

    Interest
    expense: 

    Reedy
    Creek Purchase Agreement 
    $(695) 
    $—  
    $(695) 
    $(695) 
    $—  
    $(695)

    ZELSUVMI
    Royalty Agreement 
     (472) 
     —  
     (472) 
     (472) 
     —  
     (472)

    Channel
    Products Royalty Agreement 
     (149) 
     —  
     (149) 
     (149) 
     —  
     — 

    Other 
     (30) 
     (39) 
     9  
     (382) 
     (