Company: PTHS
Filing Date: 2025-11-13
Form Type: 10-Q
Source: 0001753926-25-001764
Chunk: 157

Company: Pelthos Therapeutics Inc.
Filing Date: 2025-11-13
Form: 10-Q
Item: Part II, Item 1
Chunk 157
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From time to time, we may be involved in
legal proceedings arising in the ordinary course of our business. We are not presently a party to any legal proceedings that, in
the opinion of our management, would have a material adverse effect on our business. Regardless of outcome, litigation can have
an adverse impact on us due to defense and settlement costs, diversion of management resources, negative publicity and reputation
harm, and other factors.

Kopfli Matter

On February 14, 2024, Chromocell’s
board of directors received a demand letter from an attorney representing Chromocell Holdings and its former Chief Executive Officer
and former Chief Strategy Officer, Mr. Christian Kopfli, who was released for “cause.” Mr. Kopfli alleged an improper
termination for “cause” and claimed to seek monetary damages in the amount of $479,169. Of the $479,169 asserted by
Mr. Kopfli, as of September 30, 2024, Chromocell had accrued $363,091 in compensation expenses associated with Mr. Kopfli’s
prior employment with Chromocell. However, Chromocell believed the assertions made by Mr. Kopfli were without merit and commenced
a lawsuit against Mr. Kopfli and Chromocell Holdings in the Supreme Court for the State of New York, County of New York on June
7, 2024 (Index No. 652917/2024, the “New York Action”), asserting causes of action against Mr. Kopfli for breach of
the Employment Agreement entered into on January 10, 2023 between Chromocell and Mr. Kopfli, breach of fiduciary duty by Mr. Kopfli,
as well as breach of contract against Chromocell Holdings. Chromocell also asserted a “faithless servant” claim against
Mr. Kopfli, seeking a ruling that Mr. Kopfli was not entitled to compensation from Chromocell. Chromocell sought monetary damages
against Mr. Kopfli and Chromocell Holdings in the New York Action, plus disgorgement of all compensation previously paid or accrued
to Mr. Kopfli by Chromocell.

By Order dated October 3, 2024, the court
in the New York Action awarded Chromocell a default judgment against Mr. Kopfli and Chromocell Holdings on all claims. On October
7, 2025, following an inquest held before