Company: PTHS
Filing Date: 2025-11-13
Form Type: 10-Q
Source: 0001753926-25-001764
Chunk: 49

Company: Pelthos Therapeutics Inc.
Filing Date: 2025-11-13
Form: 10-Q
Item: Part I, Item 1
Chunk 49
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 Products, regulatory approvals, changing standards of care, the introduction of competing products, manufacturing
or other delays, generic competition, intellectual property matters, adverse events that result in regulatory authorities placing
restrictions on the use of the drug products, and other events or circumstances that are not currently foreseen. Changes to any
of these factors could result in increases or decreases to both forecasted revenues and interest expense.

The
following table provides the significant assumptions used in determining the fair value of the financing used in allocating the
proceeds based on relative fair value for the ZELSUVMI Royalty Agreement and the Channel Products Royalty Agreement, in addition
to managements forecasts and estimates as it relates to the future cash flow of the underlying assets (weighted average, as applicable):

    Schedule of assumptions used in fair value of financing 
    ZELSUVMI Royalty Agreement  
    Channel Products Royalty Agreement 

    Discount rate 
     16.0% 
     20.3%

    Probability of success 
     85.0% 
     47.2%

During
the three months ended September 30, 2025, the Company paid no royalties to licensing counterparties based on the payment terms
within the respective license agreements.

The
following table provides the activity of the financing from the effective date of July 1, 2025 through September 30, 2025 both
for the ZELSUVMI Royalty Agreement and the Channel Products Royalty Agreement (weighted average, as applicable):

    Schedule of financing activity 
    ZELSUVMI Royalty Agreement  
    Channel Products Royalty Agreement  
    Total 

    Initial carrying value 
    $8,876  
    $1,945  
    $10,821 

    Interest accretion 
     579  
     149  
     728 

    Royalty payments accrued 
     (107) 
     —  
     (107)

    Carrying value of the financing at September 30, 2025 
     9,348  
     2,094  
     11,442 

    Less: current portion 
     2,021  
     711  
     2,732 

    Carrying value of the financing at September 30, 2025, net of current portion 
    $7,327  
    $1,383  
    $8,710