Company: PTHS
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001753926-25-000503
Chunk: 364

Company: Pelthos Therapeutics Inc.
Filing Date: 2025-03-27
Form: 10-K
Item: Item 1A
Chunk 364
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 of up to 15 years from the date of the first commercial sale of the
Spray Formulations. To date, we have paid $0 to Benuvia as royalty on net sales of the Spray Formulations. Pursuant to the Benuvia
Stock Issuance Agreement, we issued to Benuvia 384,226 shares of our Common Stock, which may be offered and sold pursuant to the
Resale Prospectus. Benuvia will be responsible for the manufacturing and supply of the Spray Formulations, which is capped not
to exceed a specific gross margin for Benuvia, and we have a most favored nation rate on development and regulatory services.

Under
the Benuvia License Agreement, we will have exclusive, worldwide rights to develop, commercialize and distribute the Spray Formulations.
Further, we have the right to request a bid from a third party to manufacture the Spray Formulations once each year.

The
Benuvia License Agreement contains standard termination provisions. The Benuvia License Agreement may be terminated in its entirety,
on a Spray Formulation by Spray Formulation basis, and by country by county for a material breach not cured within sixty (60)
days after written notice thereof. If we breach any of our payment obligations under the terms of the Benuvia License Agreement
that are not the subject of a good faith dispute and are not cured within twenty (20) business days following notice thereof,
Benuvia may terminate the Agreement upon written notice to us. We also have the right to terminate the Benuvia License Agreement
in the event we determine, in our reasonable business judgment, that (i) any of the Spray Formulations will not be differentiated
from oral tablets to result in a financially viable product or (ii) after having discussed a Spray Formulations with the FDA,
we determine in our reasonable business judgment, that the cost of development of such Spray Formulation would exceed any reasonable
forecast of a positive financial return. In the event we terminate the License Agreement, the parties will negotiate in good faith
a license agreement to any improvements we made to the Spray Formulations, including any clinical trial data, and Benuvia will
pay us a pre-determined royalty for such license. Mr. Davis, one of our directors, serves as the Chairman and Chief Executive
Officer of Benuvia Holdings, LLC, which is the ultimate parent company of Benuvia.

101 

On
February 8, 2024, we and certain affiliates of the Representative