Company: PTHS
Filing Date: 2025-05-09
Form Type: PREM14C
Source: 0001140361-25-018219
Chunk: 441

Company: Pelthos Therapeutics Inc.
Filing Date: 2025-05-09
Form: PREM14C
Chunk 441
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 reflect the effects of the Merger and PIPE Financing: 4(a) Reflects the total estimated merger consideration as outlined in Note 3, consisting of the estimated fair value of Channel Series A Preferred Stock issued of $39.8 million. See Note 3 for significant estimates and assumptions used to estimate the total merger consideration for the purpose of preparing the pro forma condensed combined financial information. 4(b) Reflects a net adjustment to recognize the estimated fair value of LNHC’s identifiable intangible assets. The estimated net fair value and the useful life of the intangible assets expected to be acquired is as follows (in thousands):

|                                                          |     |  Estimated 
 fair value |     |     Average 
   estimated 
 useful life |     |       Annual 
 amortization 
      expense |
| Developed technology                                     |     |    $30,500 |     |          13 |     |       $2,346 |
| Sato licensing agreement                                 |     |        950 |     |           9 |     |          106 |
| Total estimated fair value of intangible assets acquired |     |     31,450 |     |             |     |        2,452 |

The preliminary fair value of developed technology was estimated using the “multi-period excess earnings” method, an income approach that considers the net cash flows expected to be generated by the intangible asset by excluding any cash flows related to contributory assets. Significant assumptions include the expected useful life of the patent, contributory asset charges and the concluded discount rate. The preliminary fair value of the Sato licensing agreement was estimated using the “relief from royalty” method, an income approach that considers the market-based royalty a company would pay to enjoy the benefits of the trade name or technology in lieu of actual ownership of the technology. Significant assumptions include the royalty rate, forecasted cash flows of the license agreement and concluded discount rate. The identified intangible assets and related amortization are preliminary and based on preliminary valuations prepared by third-party advisors and reviewed by management. As discussed above, the amount that will ultimately be allocated to identified intangible assets and the subsequent amortization expense may differ materially from this preliminary allocation. In addition, the amortization impacts will ultimately be based upon the periods in which the associated economic benefits are expected to be derived. Therefore, the amount of amortization following the Merger may differ significantly between periods based upon the final value assigned and amortization methodology used for each identified intangible asset.

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