Company: PTHS
Filing Date: 2025-05-27
Form Type: DEFM14C
Source: 0001140361-25-020509
Chunk: 28

Company: Pelthos Therapeutics Inc.
Filing Date: 2025-05-27
Form: DEFM14C
Chunk 28
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 to close immediately prior to the closing of the Merger. Each share of Channel Series A Preferred Stock is initially convertible into 1,000 shares of Channel common stock. The gross proceeds from the PIPE Financing are expected to be approximately $50.1 million, consisting of approximately $50.0 million in cash and the conversion of approximately $0.1 million of principal and interest payable under an outstanding convertible note issued by Channel, before paying estimated expenses. The funding of the cash Purchase Price by Ligand, Nomis Bay and one other investor will be offset by the repayment of certain bridge loans issued by such investors to LNHC. The closing of the PIPE Financing is conditioned upon all conditions to the closing of the Merger being satisfied or waived, the Merger being set to occur substantially concurrently with the PIPE Financing, entry into the Royalty Agreements, as well as certain other conditions. Immediately following the Transactions, the Channel securityholders as of immediately prior to the Merger are expected to hold approximately 7.9% of the shares of combined company capital stock, Ligand, including its

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participation in the PIPE Financing, is expected to hold approximately 55.7% of the shares of combined company capital stock, and the other PIPE Investors are expected to hold approximately 36.3% of the shares of combined company capital stock, in each case, on a fully diluted basis, subject to certain assumptions.

| Q. | Why are the two companies proposing to merge? |

| A. | Channel’s and LNHC’s management believe that combining the two companies will result in a company with a strong leadership team and substantial capital resources, positioning it to focus on the commercialization of ZELSUVMI following consummation of the Merger and potentially developing and, if approved, commercializing novel therapies to treat patients suffering from dermatological and/or pain related indications for which there are no good therapeutic options. For a more complete description of the reasons for the Merger, please see the sections titled “The Merger-Channel Reasons for the Merger” and “The Merger-LNHC Reasons for the Merger” beginning on pages107and110, respectively, of this information statement. |

| Q. | What is the PIPE Financing? |

| A. | On April 16, 2025, Channel entered into the Purchase Agreement with the PIPE Investors, pursuant to which the investors have agreed to subscribe for and purchase an aggregate of approximately 50,100 of shares of Channel Series