Company: PTHS
Filing Date: 2025-11-13
Form Type: 10-Q
Source: 0001753926-25-001764
Chunk: 47

Company: Pelthos Therapeutics Inc.
Filing Date: 2025-11-13
Form: 10-Q
Item: Part I, Item 1
Chunk 47
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 worldwide, other than in Japan; and (ii) 3.46% of non-royalty sublicensing payments received by the Company
for its sublicensing of rights to ZELSUVMI, and after the expiration of the initial royalty term, NRV will receive (i) a 1.2%
royalty on net sales of ZELSUVMI worldwide, other than in Japan; and (ii) 3.46% of non-royalty sublicensing payments received
by LNHC for its sublicensing of rights to ZELSUVMI. The initial royalty term is defined as, on a country-by-country basis, the
period of time commencing on the effective date and continuing until the expiration or termination of the last to expire valid
claim of the patents that cover the ZELSUVMI.

On
July 1, 2025, the Company and NRV, Ligand, and Madison Royalty LLC, a Colorado limited liability company (“Madison”,
being formed on behalf of certain of the legacy Channel directors and management team with the Company’s Chief Financial
Officer as the sole and managing member as of September 30, 2025), entered into a Purchase and Sale Agreement (the “Channel
Products Royalty Agreement”), pursuant to which the Company sold to each of NRV, Ligand, and Madison, and each of NRV, Ligand,
and Madison purchased, all of the Company’s rights, title and interest in and to a portion of the Company’s revenue
payments all accounts related to or utilizing the covered products, as defined within that agreement (the “Channel Covered
Products”). The purchase price was $1.

Under
the terms of the Channel Products Royalty Agreement, (A) prior to the expiration of the Initial Royalty Term, (i) NRV will receive
a 5.3% royalty, Ligand will receive a 1.7% royalty and Madison will receive a 1.5% royalty on Net Sales (as defined in the Channel
Products Royalty Agreement) of the Channel Covered Products worldwide, and (ii) NRV will receive 12.23%, Ligand will receive 3.92%
and Madison will receive 3.46% of non-royalty sublicensing payments received by Pharmaceutical Sub for its sublicensing of rights
to the Channel Covered Products worldwide; and (B) after the expiration of the Initial Royalty Term, (i) NRV will receive a 4.24%
roy