Pelthos Therapeutics sells one commercial product, ZELSUVMI (berdazimer topical gel, 10.3%), the first FDA-approved at-home treatment for molluscum contagiosum, a common viral skin condition in children. It was approved in January 2024 and launched in the United States on July 10, 2025, through national and regional wholesalers. The company came out of a July 1, 2025 merger of Channel Therapeutics with LNHC, a Ligand Pharmaceuticals subsidiary that owned the ZELSUVMI rights and manufacturing know-how. In the fourth quarter of 2025 it also acquired XEPI (an impetigo cream) and XEGLYZE (a head-lice lotion), which are being prepared for launch. It also holds a Japanese license arrangement with Sato Pharmaceutical. WHAT THE NUMBERS SHOW. In 2025, the first six months of sales, net product revenue was $16.2 million against total costs of $49.2 million, including $42.5 million of selling and administrative expense for a field force of about 53 sales staff. Cash used by operations was $22.6 million. After removing working-capital timing ($1.3 million of cash benefit) and stock compensation ($5.5 million), owner earnings were about negative $29.4 million, or negative $15.62 per share. In the first quarter of 2026 revenue was $10.9 million (gross margin roughly 85 percent), but selling and administrative expense was $21.1 million and operating cash flow was negative $13.1 million. Before the launch the company was a small preclinical pain-drug developer that also burned cash (negative $13.68 per share in 2024), so the history offers no profitable year to anchor a valuation. HOW WE VALUED IT. We only credit value that is already in evidence. The product has real sales and a high gross margin, but sales have to roughly double from the first-quarter level before they cover today's selling costs (we estimate breakeven at about $25 million of quarterly revenue), and nothing signed or demonstrated shows that happening. Revenue growth from a young launch, the coming launches of XEPI and XEGLYZE, an eventual Japanese approval, and any later cost cutting are all plausible but not yet secured or proven, so we leave them out. With those left out, every case describes a business that loses cash and is worth $0 before debt. DEBT. The company owes $30 million drawn in January 2026 on a $50 million senior secured term loan from Horizon Technology Finance (a further $20 million is available only if milestones are met; the filing text we reviewed did not give the interest rate or maturity), and $18 million of 8.5 percent senior secured convertible notes due November 6, 2027, convertible at $29.73 a share, which we treat as debt because conversion is not certain when the business is worth nothing. Because those notes carry above our 6 percent standard, we add about $0.5 million. Against this it holds about $32 million of cash at March 31, 2026, but at the first-quarter burn rate of roughly $13 million a quarter that cash covers only about two to three quarters. The company also owes ZELSUVMI royalties (a low single-digit percent of sales to Reedy Creek) and has given the convertible noteholders a 5 percent royalty on XEPI and the Japanese royalty stream; those run through operating costs, so we did not subtract them again. BEAR, BASE AND BULL. In each case the business is worth $0, the company owes about $48.5 million, and it holds about $32 million of cash, leaving a shortfall of roughly $16.5 million, or about negative $4.30 per share on 3.83 million shares. In plain terms, on what can be evidenced today the company owes more than the business is worth. The cases are identical because none of the drivers that could make the business profitable meet our standard of evidence today, and the drivers that could hurt it (the November 2027 convertible maturity, a cash runway of a few quarters, and the requirement that ZELSUVMI be approved in certain foreign markets by March 31, 2027 or the licensor may terminate) only deepen a shortfall that is already there. This is a statement about what is proven, not a prediction that the shares are worthless: if ZELSUVMI sales keep climbing on the existing sales force, the equity could be worth a meaningful amount, but we cannot say how much from the record. WHAT WOULD MAKE THIS WRONG. If quarterly ZELSUVMI revenue moves past roughly $25 million with selling costs held near current levels and operating cash flow turns positive for consecutive quarters, the business would have real earning power and this valuation would rise materially. Conversely, additional equity raises to fund the burn would dilute existing holders. The company's own 2025 annual report says the earlier doubt about its ability to continue was alleviated by the convertible notes and the Horizon loan; that conclusion depends on the loan and on sales growth. Two items could not be reconciled from the filings we reviewed: the terms of the Horizon loan, and the difference between the convertible notes' $18 million principal and the roughly $39 million fair value carried on the balance sheet (which reflects the royalty and conversion features).