Company: PTHS
Filing Date: 2025-05-27
Form Type: DEFM14C
Source: 0001140361-25-020509
Chunk: 356

Company: Pelthos Therapeutics Inc.
Filing Date: 2025-05-27
Form: DEFM14C
Chunk 356
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 will be research and development and management overhead, including costs of being a public company. Of these, research and development is a significant expense which has been utilized for the furtherance of Channel’s CC8464, CT2000 and CT3000 programs. Channel has based the research and development costs on current clinical and pre-clinical trial parameters and expectations on certain existing tax credits, and there is no certainty that the clinical and pre-clinical trial parameters or tax credits available to Channel will remain as they are, which could lead to changes in Channel’s research and development expenditures. Cash used to fund operating expenses is impacted by the timing of when Channel pays these expenses, as reflected in the change in Channel’s outstanding accounts payable, accrued expenses and prepaid expenses. Channel expects to continue to incur significant and increasing expenses and operating losses in connection with Channel’s ongoing research and development activities. As a result, Channel expects to continue to incur operating losses and negative operating cash flows for the foreseeable future. As a result, Channel will need to raise additional funding through strategic relationships, public or private equity or debt financings, credit facilities, grants or other arrangements or some combination thereof. If such funding is not available or not available on terms acceptable to Channel, Channel’s current development plan and plans for expansion of Channel’s general and administrative infrastructure may be curtailed. If Channel raises additional funds through the issuance of preferred stock, convertible debt securities or other debt financing, these securities or other debt could contain covenants that restrict Channel’s operations. Any other third-party funding arrangement could require Channel to relinquish valuable rights. The source, timing and availability of any future financing will depend principally upon market conditions. Funding may not be available when needed, at all, or on terms acceptable to Channel. Lack of necessary funds may require Channel to, among other things, delay, scale back or eliminate expenses including some or all of Channel’s planned development. There is substantial doubt about Channel’s ability to continue as a going concern. Cash Flows The following table summarizes Channel’s cash flows for the three months ended March 31, 2025 and 2024:

|                                           |     | Three Months Ended March 31, 2025 and 2024 
                                       2025 |     |         2024 |     |     $ Change |     | % Change |
|:------------------------------------------|:----|-------------------------------------------:|:----|-------------:|:----|-------------:|:----|:---------|
| Net cash used in operating activities