Company: PTHS
Filing Date: 2025-05-13
Form Type: 10-Q
Source: 0001753926-25-000790
Chunk: 90

Company: Pelthos Therapeutics Inc.
Filing Date: 2025-05-13
Form: 10-Q
Item: Part I, Item 2
Chunk 90
---
 with interest. The
February Bridge Note bears interest on the outstanding principal amount at an annual rate equal to 6.0%. The February Bridge Note
may be prepaid by the Company without penalty, in whole or in part, upon two days’ prior written notice to the Holder. All
unpaid principal, together with any then unpaid and accrued interest and other amounts payable under the February Bridge Note,
will otherwise be due and payable on the earliest of: (i) May 25, 2025, (ii) the consummation of a Corporate Event (as defined
in the February Bridge Note), or (iii) when, upon or after the occurrence of an Event of Default (as defined in the February Bridge
Note), such amounts are declared due and payable by the Holder or made automatically due and payable in accordance with the terms
of the February Bridge Note.

Future
Funding Requirements

Our
primary use of cash is to fund clinical development, operating expenses and repay accrued liabilities associated with our IPO
and prior operating expenses.

With
respect to the Company’s future expected operations expenses, the primary expense drivers will be research and development
and management overhead, including costs of being a public company. Of these, research and development is a significant expense
which has been utilized for the furtherance of the Company’s CC8464, CT2000 and CT3000 programs. We have based the research
and development costs on current clinical and pre-clinical trial parameters and expectations on certain existing tax credits,
and there is no certainty that the clinical and pre-clinical trial parameters or tax credits available to the Company will remain
as they are, which could lead to changes in our research and development expenditures. Cash used to fund operating expenses is
impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable, accrued
expenses and prepaid expenses.

34

We
expect to continue to incur significant and increasing expenses and operating losses in connection with our ongoing research and
development activities. As a result, we expect to continue to incur operating losses and negative operating cash flows for the
foreseeable future.

As
a result, we will need to raise additional funding through strategic relationships, public or private equity or debt financings,
credit facilities, grants or other arrangements or some combination thereof. If such funding is not available or not available
on terms acceptable to us, our current development plan and plans for expansion of our general and administrative infrastructure
may be curta