[Form 4] Channel Therapeutics Corporation Insider Trading Activity

Rhea-AI Filing Summary

Form 4 highlights for Pelthos Therapeutics Inc. (PTHS) filed 07/03/2025:

• Reporting person: Todd C. Davis, identified as both a Director and 10% Owner of the issuer through his role as CEO and director of Ligand Pharmaceuticals Inc. ("Ligand").
• Non-derivative transaction: On 07/01/2025, 1,500,000 shares of common stock were acquired (Code C – conversion) at an effective price of $10 per share following the conversion of Series A preferred stock. Post-transaction indirect holding (via Ligand) stands at 1,500,000 shares. A small disposition of 2,917 common shares is also reported.
• Derivative transactions: • 15,000 shares of Series A convertible preferred stock were converted into 1,500,000 common shares (Code C). • 31,278.681 shares of Series A convertible preferred stock were received (Code J – merger related), representing 3,127,868 underlying common shares. Remaining indirect derivative position totals 3,127,868 common share equivalents.
• Corporate actions: All share figures reflect a 1-for-10 reverse stock split effected on 07/01/2025. The preferred shares are convertible at any time but subject to a 49.9% ownership cap.
• Merger context: Securities were received in exchange for LNHC, Inc. shares in connection with the merger of CHRO Merger Sub, Inc. into LNHC, a wholly-owned Ligand subsidiary, under the 04/16/2025 Merger Agreement.

The filing signals a substantial increase in Mr. Davis’s indirect equity exposure to Pelthos through Ligand, aligning his economic interests with common shareholders while also disclosing the structural changes stemming from the merger and reverse split.

Insights

Securities Analyst

TL;DR: Insider converted preferred into 1.5 M shares and gained 3.13 M more via merger, raising indirect stake post-reverse split.

From a capital-structure standpoint, the conversion of 15,000 Series A preferred shares removes a senior security layer and increases the free-float by 1.5 million shares. The follow-on receipt of 31,278.681 preferred shares adds a potential 3.13 million shares of overhang, although conversion is capped at 49.9% ownership. The reverse split makes per-share metrics clearer but does not alter underlying value. Overall, Davis—through Ligand—now controls roughly 4.63 million common share equivalents, cementing strategic influence. While not a cash purchase, the insider’s enlarged position may be interpreted as a vote of confidence and aligns interests ahead of post-merger integration.

Corporate Governance Expert

TL;DR: Director/10% owner’s stake climbs; governance focus shifts to mitigating conversion-related dilution risk.

The filing underscores significant concentration of ownership: Davis, via Ligand, now beneficially owns >10% of Pelthos stock, reinforcing control. The 49.9% conversion blocker protects minority holders, yet the sizeable derivative position still represents potential dilution. Board oversight will be needed to balance Ligand’s influence with independent director responsibilities. Transparent disclosure of the merger exchange ratio and split adjustment helps meet Section 16 obligations, reflecting sound compliance practices.

SEC Form 4

FORM 4

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934
or Section 30(h) of the Investment Company Act of 1940

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Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

Check this box to indicate that a transaction was made pursuant to a contract, instruction or written plan for the purchase or sale of equity securities of the issuer that is intended to satisfy the affirmative defense conditions of Rule 10b5-1(c). See Instruction 10.

1. Name and Address of Reporting Person^*

Davis Todd C

(Last) (First) (Middle)

C/O PELTHOS THERAPEUTICS INC.

4020 STIRRUP CREEK DRIVE

(Street)

DURHAM NC 27703

(City) (State) (Zip)

2. Issuer Name and Ticker or Trading Symbol
Pelthos Therapeutics Inc. [ PTHS ]

5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)

X	Director	X	10% Owner
	Officer (give title below)		Other (specify below)

3. Date of Earliest Transaction (Month/Day/Year)
07/01/2025

4. If Amendment, Date of Original Filed (Month/Day/Year)

6. Individual or Joint/Group Filing (Check Applicable Line)

X	Form filed by One Reporting Person
	Form filed by More than One Reporting Person

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1. Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	3. Transaction Code (Instr. 8)		4. Securities Acquired (A) or Disposed Of (D) (Instr. 3, 4 and 5)			5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4)	6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
			Code	V	Amount	(A) or (D)	Price
Common Stock	07/01/2025		C		1,500,000(1)	A	$10(1)	1,500,000(1)	I	By Ligand Pharmaceuticals Incorporated(2)
Common Stock								2,917	D

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Transaction Date (Month/Day/Year)	3A. Deemed Execution Date, if any (Month/Day/Year)	4. Transaction Code (Instr. 8)		5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5)		6. Date Exercisable and Expiration Date (Month/Day/Year)		7. Title and Amount of Securities Underlying Derivative Security (Instr. 3 and 4)		8. Price of Derivative Security (Instr. 5)	9. Number of derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4)	10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)
				Code	V	(A)	(D)	Date Exercisable	Expiration Date	Title	Amount or Number of Shares
Series A Convertible Preferred Stock	$10(1)	07/01/2025		C			15,000	(3)	(3)	Common Stock	1,500,000(1)	$0	3,000(3)	I	See footnote(2)
Series A Convertible Preferred Stock	$10(1)	07/01/2025		J		31,278.681(4)		(3)	(3)	Common Stock	3,127,868(1)	(4)	3,127,868(3)	I	See footnote(2)

Explanation of Responses:

1. The numbers reported herein have been adjusted to reflect the 1-for-10 reverse stock split effected by the Issuer on July 1, 2025.

2. Todd Davis is the Chief Executive Officer and a member of the board of directors of Ligand Pharmaceuticals Inc. ("Ligand"). By virtue of this relationship, Mr. Davis may be deemed to beneficially own the shares of Common Stock held of record by Ligand. Mr. Davis disclaims any such beneficial ownership except to the extent of his pecuniary interest therein.

3. The Series A convertible preferred stock is convertible at any time, at the holder's election, and has no expiration date. The Series A convertible preferred stock is subject to a contractual limitation such that the holder may not convert Series A convertible preferred stock to the extent that after giving effect to such conversion, the holder (together with its attribution parties as defined in the certificate of designations) would beneficially own in excess of 49.9% of the shares of common stock outstanding immediately after giving effect to such conversion.

4. Received in exchange for shares of LNHC, Inc. ("LNHC") common stock in connection with the merger of CHRO Merger Sub, Inc. ("Merger Sub"), a wholly owned subsidiary of the Issuer, with and into LNHC, a wholly-owned subsidiary of Ligand, with LNHC continuing as a wholly-owned subsidiary of the Issuer and the surviving corporation of the merger, pursuant to the Merger Agreement, dated as of April 16, 2025, by and among the Issuer, Merger Sub, LNHC, and solely for the purposes of Article III thereof, Ligand.

	/s/ Todd C. Davis	07/03/2025
	** Signature of Reporting Person	Date
Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
* If the form is filed by more than one reporting person, see Instruction 4 (b)(v).
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FAQ

What did the Form 4 for Pelthos Therapeutics (PTHS) report?

It showed Todd C. Davis converted 15,000 Series A preferred shares into 1.5 million common shares and received additional preferred shares tied to a merger.

How many Pelthos common shares does Todd Davis now beneficially own?

Indirectly through Ligand, he controls 1,500,000 common shares plus derivative rights to 3,127,868 more.

What was the effective date of the transactions?

The reported transactions occurred on July 1, 2025, two days before the filing date.

Was there a stock split mentioned in the filing?

Yes, all share counts reflect a 1-for-10 reverse stock split executed on July 1, 2025.

Why are Series A preferred shares subject to a 49.9% cap?

The certificate of designations limits conversions so the holder cannot exceed 49.9% ownership after any conversion, protecting minority investors.