Company: PTHS
Filing Date: 2025-05-27
Form Type: DEFM14C
Source: 0001140361-25-020509
Chunk: 96

Company: Pelthos Therapeutics Inc.
Filing Date: 2025-05-27
Form: DEFM14C
Chunk 96
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 the shares of Channel common stock to be issued under the to the Channel Therapeutics Corporation 2023 Equity Incentive Plan (the “Prior Plan”) and, as a result, all shares of Channel common stock acquired under our plans will also be freely tradable under the Securities Act, subject to the terms of any lock-up agreements, unless purchased by our affiliates. In addition, 1,944,444 shares of Channel common stock has been reserved for future issuances under the Prior Plan.

In connection with the Bridge Financings (defined below), Channel was required to file a registration statement within 180 calendar days after the consummation of the IPO, providing for the resale of Channel common stock, which includes 549 Bonus Shares (as defined below), received by holders of the senior secured convertible notes upon conversion of such notes. As of May 23, 2025, Channel has not filed a registration statement in connection with the Bridge Financings, and the investors that participated in the Bridge Financings have not objected to the fact that Channel has not filed such registration statement nor have they requested the payment of partial liquidated damages pursuant to the terms of the Bridge Documents.

In connection with that certain Common Stock Purchase Agreement, dated as of July 26, 2024 (the “CEF Purchase Agreement”), Channel filed a registration statement, providing for the resale of the shares of Channel common stock issuable pursuant to the CEF Purchase Agreement. In the future, it may issue additional shares of Channel common stock or other equity or debt securities convertible into Channel common stock in connection with draw-downs under the CEF Purchase Agreement, a financing, acquisition, litigation settlement or employee arrangement or otherwise. Any of these issuances could result in substantial dilution to our existing stockholders and could cause the trading price of its securities to decline.**

**The Channel Series C Preferred Stock has a liquidation preference over Channel common stock.**

The Channel Series C Preferred Stock has a liquidation preference that gets paid prior to any payment on Channel common stock. As a result, if Channel was to liquidate, dissolve or wind-up, each holder of Channel Series C Preferred Stock would have the right to receive payment out of our assets available for distribution, before any amount is paid to the holders of Channel common stock, in an amount in cash equal to the aggregate liquidation value of all of the shares of preferred stock held by such holder. Holders of the Channel Series C Preferred Stock will not be entitled to dividends. The payment of the liquid