Company: PTHS
Filing Date: 2025-05-27
Form Type: DEFM14C
Source: 0001140361-25-020509
Chunk: 196

Company: Pelthos Therapeutics Inc.
Filing Date: 2025-05-27
Form: DEFM14C
Chunk 196
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 to withdraw or modify its recommendation that holders of Channel common stock approve the issuance of shares of Channel Series A Preferred Stock following the receipt of an alternative Acquisition Proposal that the Channel board of directors determines in good faith (after consultation with its outside counsel and its financial advisors) is a Superior Proposal (as defined in the section titled “The Merger Agreement” beginning on page129), subject to certain restrictions imposed by the Merger Agreement, including that the Channel board of directors shall have determined in good faith (after consultation with its outside legal counsel) that the failure to take such action would be inconsistent with its fiduciary duties to Channel stockholders under applicable law and that LNHC shall have been given an opportunity to match the Superior Proposal; |

In the course of its deliberations, the Special Committee also considered a variety of risks and other countervailing factors related to the Merger and other transactions contemplated by the Merger Agreement, including, among others:

| • | the fact that Channel stockholders will be sharing participation of Channel’s upside with Ligand as part of the combined company; |

| • | the substantial expenses to be incurred in connection with the Merger and the other transactions contemplated by the Merger Agreement; |

| • | the fact that projections of future results of operations and synergies are estimates based on assumptions that may not be realized within the expected timeframe or at all; |

| • | the possible volatility, at least in the short term, of the trading price of Channel common stock resulting from the announcement of the Merger Agreement; |

| • | the risk that the Merger might not be consummated in a timely manner or at all and the potential adverse effect of the public announcement of the Merger Agreement or on the delay or failure to complete the transactions contemplated by the Merger Agreement on Channel’s financial position; |

| • | the risk that the PIPE Financing might not be consummated in a timely manner or at all; |

| • | the terms of the Merger Agreement, including covenants relating to (1) the two companies’ conduct of their respective businesses during the period between the signing of the Merger Agreement and the completion of the Merger and the other transactions, including the requirement that the two companies conduct business only in the ordinary course, subject to specific exceptions and (2) the restrictions on Channel’s ability to solicit alternative transaction proposals and dispose of its legacy assets; |

| • | the potential for litigation relating to the proposed transactions and the associated costs, burden and inconvenience involved in