Company: PTHS
Filing Date: 2025-05-27
Form Type: DEFM14C
Source: 0001140361-25-020509
Chunk: 575

Company: Pelthos Therapeutics Inc.
Filing Date: 2025-05-27
Form: DEFM14C
Chunk 575
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an Acquisition, refers to the corresponding part of Novan's business (“Predecessor”).

As a result of the Novan Acquisition accounting, the results of operations, financial position and cash flows of the Predecessor and Successor are not directly comparable. The accompanying financial statements include a Predecessor period (which includes the period from January 1, 2023 through September 27, 2023 (date of Novan Acquisition), and a Successor period (from September 28, 2023 through December 31, 2024). A black line between the Successor and Predecessor periods has been placed in the financial statements and in the tables to the notes to the financial statements to highlight the lack of comparability between these two periods.

The Successor's and Predecessor's financial statements have been prepared on a stand-alone basis, in conformity with United States generally accepted accounting principles (U.S. GAAP), and are derived from consolidated accounting records of Ligand and Novan, respectively.

#### Parent Company Net Investment
Successor and Predecessor are under the control of Ligand and Novan, respectively (commonly referred to as “Parent” or “Parent Company”). Accordingly, the Parent Company net investment in Successor and Predecessor is shown in lieu of stockholder’s equity in the financial statements. All significant intercompany transactions with the Parent Company are deemed to have been paid in the period the costs were incurred. Expenses related to corporate allocations are considered to be effectively settled for cash in the financial statements at the time the transaction was recorded.

#### Corporate Allocations
The financial statements include all revenues, expenses, assets a liabilities directly associated with the Company's business activity, as well as an allocation of certain general and administrative expenses related to facilities, functions and services provided by the Parent.

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#### TABLE OF CONTENTS
Corporate expenses have been allocated to the Successor based on a relative usage of (benefit from) certain corporate divisions, or specific corporate employees, in the Successor business. Management believes that methodology applied to Successor corporate expenses allocations are reasonable and consistent across the Successor reporting periods. Corporate expenses have been allocated to the Predecessor based on a relative salary percentage between non-corporate divisions of Novan. Management believes that methodology applied to Predecessor corporate expenses allocations is reasonable.

All of the allocations and estimates in the financial statements are based on assumptions that management believes are reasonable. However, the financial statements included herein