Company: PTHS
Filing Date: 2025-11-25
Form Type: DEF 14A
Source: 0001753926-25-001827
Chunk: 64

Company: Pelthos Therapeutics Inc.
Filing Date: 2025-11-25
Form: DEF 14A
Chunk 64
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SE American LLC Company Guide requires shareholder approval as a prerequisite to approval of applications to list additional shares when the additional shares will be issued in connection with the sale, issuance, or potential issuance by the issuer of common stock (or securities convertible into common stock) equal to 20% or more of the presently outstanding stock for less than the Minimum Price. Shares of Common Stock issuable upon the exercise or conversion of warrants, options, debt instruments, preferred stock or other equity securities issued or granted in such non-public offerings will be considered shares issued in such a transaction in determining whether the 20% limit has been reached, except in certain circumstances such as issuing warrants that are not exercisable for a minimum of six months and have an exercise price that exceeds market value.

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What is the Effect on Current Shareholders if Proposal No. 2 is Approved?

If our shareholders approve this proposal,
we will be able to eliminate the Exchange Cap in the Convertible Note Financing and therefore have the option to issue the
maximum number of shares of Common Stock issuable under the Convertible Notes, which would exceed 19.99% of our issued and outstanding
shares of Common Stock as of the date we executed the November 2025 Securities Purchase Agreement and issued the Convertible Notes.
If our shareholders approve Proposal No. 2, the rights or privileges of our existing shareholders will not be affected, except
that the economic and voting interests of each of our existing shareholders will be diluted should we issue all of the shares of
Common Stock issuable upon conversion of the Convertible Notes (the “Conversion Shares”). Although the number of shares
of our Common Stock that our existing shareholders own will not decrease, the shares of our Common Stock owned by our existing
shareholders will represent a smaller percentage of our total outstanding shares of our Common Stock after any such issuance.

Pursuant to the
terms of the Convertible Notes, if the shareholders approve Proposal No. 2 and if the Conversion Price of the Convertible Notes then
in effect is greater than $29.73 per share, the Company will be authorized, with the consent of the Required Holders, to reduce the
Conversion Price of the Convertible Notes below the current Conversion Floor Price of $34.442 per share, to the Adjustment Price of
$29.73 per share, subject to adjustment as provided for in the Convertible Notes, but, in no event, not less than any minimum price
required by applicable law or the NY