Pelthos restates Q1 results after ASC 820 error lifts convertible debt fair value by $15.8 million

• Pelthos flagged non-reliance on its Q1 2026 Form 10-Q due to a misapplication of ASC 820 in Level 3 fair values.
• Restatement will lift the fair value of convertible debt by $15.8 million, raising liabilities and widening accumulated deficit by $14.8 million.
• Non-cash expense tied to the convertible debt fair value change will increase by $14.8 million, pressuring reported net loss.
• Audit committee identified a material weakness in controls over valuation and review of Level 3 measurements tied to the convertible debt.
• No expected impact on liquidity, cash, revenue, operating expenses, or operating loss; correction sits in other income (expense).

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