On September 27, 2023, Ligand acquired certain assets of Novan, Inc. ("Novan"), after providing debtor-in-possession financing to Novan in its bankruptcy case under Chapter 11 of the U.S. Bankruptcy Code. All assets and liabilities acquired by Ligand in the Novan acquisition were held by LNHC, Inc. ("LNHC"), a wholly owned subsidiary of Ligand. On April 16, 2025, the Issuer, CHRO Merger Sub Inc., a Delaware corporation and wholly owned subsidiary of the Issuer (the "Merger Sub"), and LNHC, and solely for the purposes of Article III thereof, Ligand, entered into an Agreement and Plan of Merger (the "Merger Agreement"), pursuant to which, among other matters, and subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement, Merger Sub agreed to merge with and into LNHC, with LNHC continuing as a wholly-owned subsidiary of the issuer and the surviving corporation of the merger (the "Merger"). On April 16, 2025, in connection with the Merger Agreement, Ligand and other unrelated investors entered into a Securities Purchase Agreement with LNHC and the Issuer (the "Purchase Agreement"), pursuant to which Ligand purchased 18,000 shares of Series A Preferred Stock from the Issuer at a purchase price of $18.0 million (the "PIPE Financing"). The cash purchase price was reduced in part by the cancellation of approximately $12.7 million in bridge notes that Ligand had advanced to LNHC since the beginning of 2025 to support the commercial launch of ZELSUVMI. Ligand obtained the funds for the purchase of the Series A Preferred Stock from its working capital. On July 1, 2025, the Issuer completed the PIPE Financing and the Merger. Ligand purchased 18,000 shares of Series A Preferred Stock in the PIPE Financing. Ligand received 31,278.681 shares of Series A Preferred Stock in the Merger as consideration for its LNHC shares. The combined company began operating under the name Pelthos Therapeutics Inc. ("Pelthos") on July 1, 2025. Each share of Channel Series A Preferred Stock is convertible into 100 shares of Channel Common Stock (after giving effect to the one-for-ten reverse stock split effected on July 1, 2025). At the closing, Ligand immediately converted 15,000 shares of Series A Preferred Stock into 1,500,000 shares of Common Stock.

Registration Rights Agreement As contemplated by the Purchase Agreement, on July 1, 2025, the Issuer, Ligand and the other investors in the PIPE Financing (the "PIPE Investors") entered into a registration rights agreement (the "Registration Rights Agreement"). Pursuant to the Registration Rights Agreement, among other things, the Issuer agreed to register for resale certain shares of its Common Stock and Series A Preferred Stock held by such investors from time to time, including shares issued in the Merger and in the PIPE Financing. Pursuant to the Registration Rights Agreement, the Issuer will prepare and file a resale registration statement with the SEC on or prior to the later of (i) thirty (30) days following the closing of the PIPE Financing and (ii) fifteen (15) calendar days after the due date of the next periodic report required pursuant to Section 13 of the Exchange Act. The Issuer will use its reasonable best efforts to cause this registration statement to be declared effective by the SEC within 120 calendar days of the closing of the PIPE Financing (or within 150 calendar days if the SEC reviews the registration statement). The foregoing description of the Registration Rights Agreement does not purport to be complete and is qualified in its entirety by the full text of such agreement, a copy of which is filed hereto as Exhibit 7 and is incorporated herein by reference. Lock-Up Agreement In connection with the closing of the Merger and the PIPE Financing, the Issuer entered into Lock-Up Agreements with certain of its stockholders, directors and executive officers, including Ligand, pursuant to which such parties have agreed not to, except in limited circumstances, offer, pledge, sell, contract to sell, sell any option to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any shares of the Issuer's Common Stock or Series A Preferred Stock, from the closing of the Merger until December 31, 2025, subject to certain exceptions. The foregoing description of the Lock-Up Agreement does not purport to be complete and is qualified in its entirety by the full text of such agreement, a copy of which is filed hereto as Exhibit 8 and is incorporated herein by reference.

Exhibit Number Description 1 Information concerning the directors and executive officers of Ligand Pharmaceuticals Incorporated. 2 Agreement and Plan of Merger, dated as of April 16, 2025, by and among Channel Therapeutics Corporation, CHRO Merger Sub Inc., LNHC, Inc. and Ligand Pharmaceuticals Incorporated (incorporated by reference to Exhibit 2.1 to the Issuer's Current Report on Form 8-K filed with the SEC on April 17, 2025). 3 Merger Agreement Waiver, dated as of July 1, 2025, by and among Channel Therapeutics Corporation, CHRO Merger Sub Inc., LNHC, Inc. and Ligand Pharmaceuticals Incorporated (incorporated by reference to Exhibit 2.2 to the Issuer's Current Report on Form 8-K filed with the SEC on July 2, 2025). 4 Securities Purchase Agreement, dated as of April 16, 2025, by and among Channel Therapeutics Corporation, LNHC Inc., and each of the investors thereto (incorporated by reference to Exhibit 10.1 to the Issuer's Current Report on Form 8-K filed with the SEC on April 17, 2025). 5 Amendment No. 1 to Securities Purchase Agreement, dated as of July 1, 2025, by and among Channel Therapeutics Corporation, LNHC Inc., and each of the investors thereto (Incorporated by reference to Exhibit 10.6 to the Issuer's Form 8-K, filed with the SEC on July 2, 2025). 6 Certificate of Designations of Rights and Preferences of the Series A Convertible Preferred Stock (Incorporated by reference to Exhibit 3.3 to the Issuer's Form 8-K, filed with the SEC on July 2, 2025). 7 Registration Rights Agreement, dated July 1, 2025, by and among Channel Therapeutics, Inc. and the investors party thereto (Incorporated by reference to Exhibit 10.9 to the Issuer's Form 8-K, filed with the SEC on July 2, 2025). 8 Lock-Up Agreement (Incorporated by reference to Exhibit 10.4 to the Issuer's Form 8-K, filed with the SEC on July 2, 2025).