Company: PTHS
Filing Date: 2025-08-13
Form Type: 10-Q
Source: 0001753926-25-001326
Chunk: 5

Company: Pelthos Therapeutics Inc.
Filing Date: 2025-08-13
Form: 10-Q
Item: Part I, Item 1
Chunk 5
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if applicable, or represented by proxy at the Annual Meeting approved the Reincorporation Merger. The Reincorporation Merger occurred
on November 18, 2024.

Merger
Transactions

On
July 1, 2025 (the “Merger Closing Date”), Channel consummated the previously announced merger transaction contemplated
by that certain Agreement and Plan of Merger, dated as of April 16, 2025 (the “Merger Agreement”), by and among Channel,
CHRO Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of the Company (“Merger Sub”), LNHC, Inc.
a Delaware corporation and a wholly owned subsidiary of Ligand Pharmaceuticals Incorporated (“Ligand”), and solely
for the purposes of Article III thereof, Ligand. Pursuant to the Merger Agreement, (i) Merger Sub merged with and into LNHC, with
LNHC as the surviving company in the merger and, after giving effect to such merger, continuing as a wholly-owned subsidiary of
the Company (the “Merger”), (ii) Channel’s name was changed from Channel Therapeutics Corporation to Pelthos
Therapeutics Inc. (“Pelthos” or the “Company”) and (iii) the Company effected a 10-for-1 reverse stock
split of all outstanding shares of its Common Stock (the “Reverse Stock Split”).

The
Common Stock share amounts included in these Notes to the Company’s financials are presented on a post-split basis and reflect
the Reverse Split.

NOTE
2 – LIQUIDITY AND GOING CONCERN

A
fundamental principle of the preparation of financial statements in accordance with GAAP is the assumption that an entity will
continue in existence as a going concern, which contemplates continuity of operations and the realization of assets and settlement
of liabilities occurring in the ordinary course of business. In accordance with this requirement, the Company has prepared its
accompanying consolidated financial statements assuming the Company will continue as a going concern.

During
the three and six months ended June 30, 2025, the Company had a net loss of approximately $3.5 million and $5.4 million,
respectively. As of June 30, 2025, the Company has cash of approximately $0.1 million and a working capital deficit $6.5 million.

Based
on the Company’s current projections, management believes there is substantial doubt about its ability to continue to