Pelthos to restate Q1 2026 results after valuation error

Pelthos Therapeutics Inc. determined that its condensed consolidated financial statements for the quarter ended March 31, 2026 can no longer be relied upon due to a misapplication of ASC 820 in valuing Level 3 fair value measurements of its convertible debt.

Rhea-AI Filing Summary

Pelthos Therapeutics Inc. determined that its condensed consolidated financial statements for the quarter ended March 31, 2026 can no longer be relied upon due to a misapplication of ASC 820 in valuing Level 3 fair value measurements of its convertible debt. After reassessing the valuation methods and inputs during the June 30, 2026 fair value measurement, the company concluded a restatement of that interim period is required.

The restatement will increase the fair value of convertible debt liabilities by $15.8 million, reduce accumulated other comprehensive income by $1.0 million, and increase accumulated deficit by $14.8 million. It will also add $14.8 million of non-cash expense to other expense and reduce other comprehensive loss by $1.0 million related to instrument credit risk. These changes affect net loss and loss per share but do not affect liquidity, cash, revenues, operating expenses, or operating loss.

The company identified a material weakness in internal control over financial reporting as of March 31, 2026, relating to controls over Level 3 fair value measurements of convertible debt and the Convertible Notes Subordination Agreement provisions. Disclosure controls and procedures were not effective, and Pelthos plans to outline remediation steps in an amended Q1 2026 report and its Q2 2026 report.

Positive

• Restatement impact is non-cash and the company states there is no impact on liquidity or cash position for the affected period.
• Revenues, operating expenses and operating loss for the affected quarter remain unchanged, as the adjustments relate to other income (expense) only.

Negative

• Previously issued Q1 2026 financial statements are deemed not reliable and will be restated, undermining reporting credibility.
• Restatement increases the fair value of convertible debt liabilities by $15.8 million, weakening the reported balance sheet.
• Accumulated deficit will increase by $14.8 million due to additional non-cash expense, worsening historical equity.
• The company identified a material weakness in internal control over financial reporting as of March 31, 2026.
• Disclosure controls and procedures were not effective as of March 31, 2026, specifically around Level 3 fair value measurements for convertible debt.

8-K Event Classification

Item 4.02 — Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review

1 item

Item 4.02 Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review Governance

Previously issued financial statements, a related audit report, or a completed interim review should no longer be relied upon.

Key Figures

Increase in fair value of convertible debt: $15.8 million Reduction in accumulated other comprehensive income: $1.0 million Increase in accumulated deficit: $14.8 million +2 more

5 metrics

Increase in fair value of convertible debt $15.8 million Increase in total liabilities in the restated March 31, 2026 balance sheet

Reduction in accumulated other comprehensive income $1.0 million Equity impact in the restated March 31, 2026 balance sheet

Increase in accumulated deficit $14.8 million Equity impact from additional non-cash expense for the affected period

Increase in non-cash expense $14.8 million Change in fair value of convertible debt in other (expense) income for Q1 2026

Decrease in change in fair value due to instrument credit risk $1.0 million Adjustment in other comprehensive loss for the affected period

Key Terms

ASC 820, Level 3 fair value measurements, convertible debt, material weakness, +2 more

6 terms

ASC 820 financial

"because of a misapplication of Accounting Standards Codification (“ASC”) 820, Fair Value Measurements"

ASC 820 is an accounting standard that tells companies how to measure and report the fair value of assets and liabilities when a clear market price doesn’t exist. It matters to investors because those reported fair values affect a company’s balance sheet and earnings, and the standard requires disclosure about how values were estimated—similar to knowing whether a used car’s listed price came from a recent sale or from an opinion, which helps assess reliability.

Level 3 fair value measurements financial

"related to certain Level 3 fair value measurements of the Company’s convertible debt"

convertible debt financial

"Level 3 fair value measurements of the Company’s convertible debt"

A convertible debt is a loan a company takes that gives the lender the option to swap the owed money for a set number of the company’s shares instead of getting cash back. It matters to investors because it can change who owns the company and how much their shares are worth: if lenders convert, existing shareholders can be diluted, but conversion can also signal confidence and reduce a company’s cash pressure — like getting a coupon that can be redeemed for store ownership rather than a refund.

material weakness financial

"resulted from a material weakness in its internal control over financial reporting"

A material weakness is a significant flaw in the systems and checks a company uses to ensure its financial reports are accurate, meaning errors or fraud could happen and not be caught. For investors it matters because it raises the risk that reported results are unreliable—similar to finding a hole in a ship’s hull—potentially leading to corrected financials, regulatory action, reduced trust, and negative effects on stock value and borrowing costs.

disclosure controls and procedures financial

"As of March 31, 2026, the Company's disclosure controls and procedures were not effective"

Policies, routines and internal checks a public company uses to identify, collect and verify information that must appear in its financial reports and public filings, and to make sure that material news is disclosed accurately and on time. Investors care because effective controls increase confidence that the company’s reported numbers and disclosures are reliable and reduce the risk of surprises, much like a building’s inspection and alarm system helps occupants trust the structure’s safety.

Convertible Notes Subordination Agreement financial

"provisions in the Convertible Notes Subordination Agreement entered into in January 2026"

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

Why is Pelthos Therapeutics (PTHS) restating its Q1 2026 financial statements?

Pelthos Therapeutics is restating Q1 2026 results due to a misapplication of ASC 820 in valuing Level 3 fair value measurements of its convertible debt. Certain subordination and conversion features were not properly reflected, making the prior statements unreliable.

How does the Pelthos Therapeutics (PTHS) restatement affect its liabilities and equity?

The restatement will increase the fair value of convertible debt liabilities by $15.8 million, reduce accumulated other comprehensive income by $1.0 million, and increase accumulated deficit by $14.8 million, negatively affecting reported equity.

Will the Pelthos Therapeutics (PTHS) restatement impact cash, liquidity, or operations?

The company states the restatement has no impact on liquidity or cash position. Revenues, operating expenses, and operating loss for the affected quarter are unchanged since the adjustments occur within other income (expense).

What internal control issues did Pelthos Therapeutics (PTHS) identify?

Pelthos identified a material weakness in internal control over financial reporting as of March 31, 2026, involving controls over valuation and review of Level 3 fair value measurements for convertible debt and a Convertible Notes Subordination Agreement.

Which financial statement line items at Pelthos Therapeutics (PTHS) will change due to the restatement?

The restatement affects the condensed consolidated balance sheet and statement of operations and comprehensive loss, including convertible debt fair value, accumulated other comprehensive income, accumulated deficit, non-cash expense, net loss, and net loss per share.

How is Pelthos Therapeutics (PTHS) addressing the identified material weakness?

Pelthos plans to describe remediation steps for the material weakness in its amended Q1 2026 report and Q2 2026 Form 10-Q, focusing on improving controls over Level 3 fair value measurements of its convertible debt.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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Available on EDGAR 08/13/2026 - 07:01 AM EDT Accepted by SEC EDGAR 08/13/2026 - 07:00 AM EDT Learn about SEC filing dates

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 12, 2026

PELTHOS THERAPEUTICS INC.

(Exact name of registrant as specified in its charter)

Nevada

001-41964

86-3335449

(State or other jurisdiction  of incorporation)

(Commission File Number)

(IRS Employer  Identification No.)

4020 Stirrup Creek Drive, Suite 110
Durham, NC									27703
(Address of registrant’s principal executive office)									(Zip code)

Registrant’s telephone number, including area code: (919) 908-2400

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o			Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o			Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o			Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o			Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.0001 per share

PTHS

The NYSE American LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company x

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Item 4.02(a). Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.

On August 12, 2026, the audit committee of our board of directors (the “Audit Committee”), in consultation with management, concluded that because of a misapplication of Accounting Standards Codification (“ASC”) 820, Fair Value Measurements, related to certain Level 3 fair value measurements of the Company’s convertible debt, the Company’s previously issued condensed consolidated financial statements in its Quarterly Report on Form 10-Q for the quarter ended March 31, 2026 (the “Affected Period”) should no longer be relied upon. As such, the Company will restate the condensed consolidated financial statements for the Affected Period. Accordingly, investors, stockholders and other users of the Company’s financial statements should no longer rely upon the Company’s previously issued financial statements for the Affected Period.

In connection with the periodic fair value measurement of the Company's convertible debt for the quarterly period ended June 30, 2026, the Company re-evaluated the valuation methodologies, assumptions and inputs used in determining the fair value of certain Level 3 fair value measurements of the Company’s convertible debt, and determined that the methodology applied in connection with the preparation of the Company’s condensed consolidated financial statements for the quarter ended March 31, 2026 was not consistent with the requirements of ASC 820. Specifically, the valuation inputs related to provisions in a subordination agreement related to the convertible debt entered into in January 2026, including extended payoff terms and a conversion rate reset feature, were not properly reflected in the valuation. As a result, the Company concluded that a restatement of its condensed consolidated financial statements for the Affected Period is necessary.

The change in the accounting treatment for the convertible debt and the resulting restatement of the Company’s condensed consolidated financial statements will include restatement of the condensed consolidated balance sheet for the Affected Period including (i) a $15.8 million increase in the fair value of convertible debt, included in total liabilities, (ii) a $1.0 million reduction in accumulated other comprehensive income, included in stockholders equity, and (iii) a $14.8 million increase in accumulated deficit, included in stockholders equity. The change in the accounting treatment for the convertible debt and the resulting restatement of the Company’s condensed consolidated financial statements will include restatement of the condensed consolidated statement of operations and comprehensive loss for the Affected Period including (i) a $14.8 million increase in non-cash expense related to the change in fair value of convertible debt, included in other (expense) income, and (ii) a $1.0 million decrease in the change in fair value of convertible debt due to instrument credit risk included in other comprehensive loss. These changes to the condensed consolidated statement of operations will also impact net loss before provision for income taxes, net loss, and net loss per common share - basic and diluted.

The restatement of the consolidated financial statements for the Affected Period will have no impact on the Company’s liquidity or cash position. There will be no impact on revenues, operating expenses or operating loss for the Affected Period as the change in fair value of the convertible debt was presented within other income (expense) and not as a component of operating loss in the Company’s condensed consolidated statements of operations.

The Company intends to restate its condensed consolidated financial statements for the interim period ended March 31, 2026 through the filing of Amendment No. 1 to its Quarterly Report on Form 10-Q for the quarter ended March 31, 2026 (the “Form 10-Q/A”).

The Audit Committee has discussed the matters disclosed in this Item 4.02 of this Current Report on Form 8-K with CBIZ CPAs P.C., the Company's predecessor independent registered accounting firm, as well as with Grant Thornton LLP, the Company's current independent registered public accounting firm appointed on May 16, 2026, subsequent to the filing of the Form 10-Q for the Affected Period.

Controls and Procedures

In connection with this restatement, the Company has concluded that the misapplication of ASC 820 resulted from a material weakness in its internal control over financial reporting that existed as of March 31, 2026, and which continues to exist. As of March 31, 2026, the Company's disclosure controls and procedures were not effective. The material weakness relates to controls over the valuation and review of Level 3 fair value measurements associated with the Company's convertible debt. Specifically, our controls did not operate effectively to identify and evaluate the valuation impact of certain provisions in the Convertible Notes Subordination Agreement entered into in January 2026, including the effect of the subordination on the extended payoff terms and the conversion rate reset feature.

The Company intends to report this material weakness in the Form 10-Q/A and in the Quarterly Report on Form 10-Q for the quarter ended June 30, 2026 and will describe therein the steps the Company has taken and is taking to remediate the material weakness.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: August 13, 2026			Pelthos Therapeutics Inc.
			By:			/s/ John M. Gay
						Name:			John M. Gay
						Title:			Chief Financial Officer

Filing Exhibits & Attachments

3 documents

Other Documents

• EX-101 XBRL TAXONOMY EXTENSION SCHEMA DOCUMENT 1.7 KB
• EX-101 XBRL TAXONOMY EXTENSION LABEL LINKBASE DOCUMENT 22.9 KB
• EX-101 XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE DOCUMENT 13.3 KB