Company: PTHS
Filing Date: 2025-05-09
Form Type: PREM14C
Source: 0001140361-25-018219
Chunk: 29

Company: Pelthos Therapeutics Inc.
Filing Date: 2025-05-09
Form: PREM14C
Chunk 29
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 investors have agreed to subscribe for and purchase an aggregate of approximately 50,100 of shares of Channel Series A Preferred Stock, at a price per share equal to the Purchase Price, subject to adjustment as set forth in the Purchase Agreement, referred to as the “PIPE Financing”, which is expected to close immediately prior to the closing of the Merger. Each share of Channel Series A Preferred Stock is initially convertible into 1,000 shares of Channel common stock. The gross proceeds from the PIPE Financing are expected to be approximately $50.1 million, consisting of approximately $50.0 million in cash and the conversion of approximately $0.1 million of principal and interest payable under an outstanding convertible note issued by Channel, before paying estimated expenses. The funding of the cash Purchase Price by Ligand, Nomis Bay and one other investor will be offset by the repayment of certain bridge loans issued by such investors to LNHC. The closing of the PIPE Financing is conditioned upon all conditions to the closing of the Merger being satisfied or waived, the Merger being set to occur substantially concurrently with the PIPE Financing, entry into the Royalty Agreements, as well as certain other conditions. |

Immediately following the Transactions, the Channel securityholders as of immediately prior to the Merger are expected to hold approximately 8.0% of the shares of combined company capital stock, including its participation in the PIPE Financing, is expected to hold approximately 55.9% of the shares of combined company capital stock, and the other PIPE Investors are expected to hold approximately 36.2% of the shares of combined company capital stock, in each case, on a fully diluted basis, subject to certain assumptions.

| Q. | What will Channel Stockholders, Channel Equity Award Holders and Channel Warrant Holders receive in the Merger? |

| A. | At the Effective Time, Channel stockholders will continue to own and hold their existing shares of Channel common stock and Channel preferred stock, as applicable. |

All options to purchase Channel common stock that are issued and outstanding immediately prior to the Effective Time will remain in effect pursuant to their terms and will be unaffected by the Merger. All Channel restricted stock unit awards that are issued and outstanding immediately prior to the Effective Time will remain in effect pursuant to their terms and will be unaffected by the Merger. The terms governing any Channel warrants outstanding as of immediately prior to the Effective Time will remain in full force and effect following the Closing of the Merger.

| Q. | What will Ligand receive in the