Company: PTHS
Filing Date: 2025-08-13
Form Type: 10-Q
Source: 0001753926-25-001326
Chunk: 137

Company: Pelthos Therapeutics Inc.
Filing Date: 2025-08-13
Form: 10-Q
Item: Part I, Item 8
Chunk 137
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 30, 2025 and 2024 was primarily the result of decreased interest
expense. The decrease in the interest expense was due to the remaining amortization of the debt discount on the Company’s
notes being accelerated upon the conversion of the notes to equity upon consummation of the IPO during the six months ended June
30, 2024.

38 

Liquidity

Sources
of Liquidity and Capital

We
are in our early stages of development and growth, without established records of sales or earnings. We will be subject to numerous
risks inherent in the business and operations of financially unstable and early stage or emerging growth companies. We have not
yet commercialized any products, and we do not expect to generate revenue from product sales of any of our compounds for several
years.

Cash
totaled $0.1 million and $0.5 million as of June 30, 2025 and December 31, 2024, respectively. As of June 30, 2025 and December
31, 2024, we had an accumulated deficit of approximately $26.9 million and $21.5 million, respectively, and had a working capital
deficit of approximately $6.5 million and $2.7 million, respectively.

Historically,
we have funded our operations from a series of cash advances from Chromocell Holdings, licensing arrangements, bridge and note
issuances and grants from the National Institutes of Health.

On
February 8, 2024, we and certain affiliates of the Representative entered into amendments to the senior secured convertible notes
issued to such affiliates of the Representative in the April Bridge Financing and September Bridge Financing to remove the automatic
conversion features from such notes (the “Bridge Financing Note Amendments”). Under the Bridge Financing Note Amendments,
both notes issued in the April Bridge Financing and the September Bridge Financing had a maturity date of March 1, 2024, and the
full principal amount of both notes and any accrued interest thereon was payable solely in cash upon the consummation of the IPO.
Both notes had an annual interest rate of eight percent (8%), which accrued daily, and was calculated on the basis of a 360-day
year (consisting of twelve 30 calendar day periods).

On
February 10, 2024, we entered into a Stock Rescission Agreement with certain affiliates of the Representative (the “Stock
Rescission Agreement” and, together with the Bridge Financing Note Amendments, the