Company: PTHS
Filing Date: 2025-09-16
Form Type: 8-K/A
Source: 0001753926-25-001500
Chunk: 151

Company: Pelthos Therapeutics Inc.
Filing Date: 2025-09-16
Form: 8-K/A
Chunk 151
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 to use the existing deferred tax assets. Our evaluation of evidence resulted in management concluding that the majority of our deferred tax assets will not be realized.

Liquidity and Capital Resources

Since Ligand’s acquisition of Novan, we have participated in Ligand’s centralized approach to cash management and financing of its operations. Accordingly, none of the cash, cash equivalents, and short-term investments at the corporate level have been assigned to our company in the condensed financial statements. Prior to separation, transfers of cash to and from Ligand have been reflected in parent company net investment in the historical condensed balance sheets, condensed statements of cash flows and condensed statements of changes in parent company net investment.

Effective January 1, 2025, we entered into a bridge loan agreement with Ligand under which any amounts of cash transfers from Ligand to us, or settlement of our expenses directly by Ligand, starting from January 1, 2025, will be considered a loan from Ligand to us. The maximum borrowing under the bridge loan agreement is $18 million. The repayment of this loan at closing of the Merger will be offset against Ligand’s funding commitment in the PIPE Financing.

In addition, on April
16, 2025, LNHC entered into a bridge loan agreement with two third-party lenders, part of the group of strategic investors led
by Murchinson, for an aggregate amount of $6 million. This loan will accumulate interest on a risk-free rate, and will be either
payable back to the lenders, or reduce their funding commitment with respect to the anticipated merger transaction.

Since the closing
of the Merger, our capital structure and sources of liquidity have changed significantly from our historical capital structure,
and Ligand is no longer be a source of liquidity for us. Since the closing of the Merger, our only sources of liquidity have been
cash on hand and cash to be generated from product sales. We expect to continue to incur losses for the foreseeable future, as
we continue to invest in commercialization activities for ZELSUVMI, add operational, financial and management information systems
and personnel to support our operations and incur additional costs associated with operating as a public company.

Our ability to continue our operations is dependent upon our ability to obtain additional capital in the future and generate cash flows from operations. Based on our current projections, management believes there is substantial doubt about our ability to continue to operate as a going concern and to fund our operations through at least the next twelve months. While we completed an equity offering of