Company: PTHS
Filing Date: 2025-08-28
Form Type: S-3
Source: 0001753926-25-001403
Chunk: 66

Company: Pelthos Therapeutics Inc.
Filing Date: 2025-08-28
Form: S-3
Chunk 66
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), subject to adjustments.

In general, a holder of shares of Series A Preferred Stock may not convert any portion of Series A Preferred Stock if the holder, together with its affiliates, would beneficially own more than 49.9% in the case of Ligand or 4.99%, in the case of the other Selling Stockholders (the “Maximum Percentage”), of the number of shares of the Company’s Common Stock outstanding immediately after giving effect to such exercise, provided, however, that a holder may increase or decrease the Maximum Percentage by giving 61 days’ notice to the Company, but not to any percentage in excess of 9.99%.

The shares of Series A Preferred Stock to be issued and sold to the Selling Stockholders were not registered under the Securities Act, and were issued and sold in reliance on the exemption from registration requirements thereof provided by Section 4(a)(2) of the Securities Act as a transaction by an issuer not involving a public offering.

The closing of the PIPE Financing occurred on July 1, 2025, immediately prior to the consummation of the Merger.

On July 1, 2025, certain Selling Stockholders entered into Series A Convertible Preferred Stockholder Side Letters (each, a “Side Letter”) with the Company, pursuant to which, immediately after the closing of the PIPE Financing on July 1, 2025, the Selling Stockholders converted 23,810 shares of Series A Preferred Stock not exceeding such Selling Stockholders’ Maximum Percentage into an aggregate of 2,381,000 shares of the Company’s Common Stock (after giving effect to the Reverse Stock Split), by providing the Company with a completed and signed Conversion Notice under the Certificate of Designation.

<div align='center'>36

JULY 2025 MERGER TRANSACTION</div>

The Merger

On the Merger Closing date, we consummated
the previously announced merger transaction contemplated by the Merger Agreement, by and among Channel, Merger Sub, LNHC, and solely
for the purposes of Article III thereof, Ligand. Pursuant to the Merger Agreement, (i) Merger Sub merged with and into LNHC, with
LNHC as the surviving company in the merger and, after giving effect to such merger, continuing as a wholly-owned subsidiary of
the Company and (ii) Channel’s name was changed from Channel Therapeutics Corporation to Pelthos Therapeutics Inc.

Following the completion of the Merger,
the business conducted by the Company became primarily