Company: PTHS
Filing Date: 2025-05-13
Form Type: 10-Q
Source: 0001753926-25-000790
Chunk: 79

Company: Pelthos Therapeutics Inc.
Filing Date: 2025-05-13
Form: 10-Q
Item: Part I, Item 2
Chunk 79
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 Company (the “Merger
Sub”), and LNHC, Inc., a Delaware corporation (“LNHC”), and solely for the purposes of Article III thereof,
Ligand Pharmaceuticals Incorporated, a Delaware corporation and the parent of LNHC (“Ligand”) entered into
an Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which, among other matters, and subject to the
satisfaction or waiver of the conditions set forth in the Merger Agreement, Merger Sub will merge with and into LNHC, with LNHC
continuing as a wholly-owned subsidiary of the Company and the surviving corporation of the merger (the “Merger”).
The Merger is intended to qualify for federal income tax purposes as a tax-free reorganization under the provisions of Section
368(a) of the Internal Revenue Code of 1986, as amended (the “Code”), or, in the event that the former stockholders
of LNHC and certain other persons are in “control” of the Company immediately after the Merger (within the meaning
of Section 368(c) of the Code), the Merger is also intended to qualify as a non-taxable exchange of shares of LNHC capital stock
for the Company’s Common Stock, within the meaning of Section 351(a) of the Code.

Subject
to the terms and conditions of the Merger Agreement, at the effective time of the Merger (the “Effective Time”), each
then outstanding share of LNHC capital stock will be converted into the right to receive a number of shares of Series A Convertible
Preferred Stock, par value $0.0001 per share (the “Series A Preferred Stock”) of the Company (subject to the payment
of cash in lieu of fractional shares) calculated in accordance with the Merger Agreement (the ratio of such conversion, the “Exchange
Ratio”). The Exchange Ratio represents the number of shares of Common Stock issuable upon conversion of the Series A Preferred
Stock that will be received for each LNHC share outstanding immediately prior to the Merger. It is calculated by dividing the
shares of Common Stock (derived from the post-closing shares of Common Stock and the LNHC allocation percentage based on the relative
valuations of $67 million for LNHC and $15 million for the Company) by the total number of LNHC shares outstanding.

Based
on current capitalization, upon the closing of the Merger, after giving effect to the PIPE Financing (as defined below), on a
pro forma