Company: PTHS
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001753926-25-000503
Chunk: 450

Company: Pelthos Therapeutics Inc.
Filing Date: 2025-03-27
Form: 10-K
Item: Item 1B
Chunk 450
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 on stock of $91,512, payment of repurchase
of common stock under Stock Repurchase Plan of $75,000 and payments on loans of $214,757.

For
the year ended December 31, 2023, net cash flows provided by financing activities were $1,022,348 resulting from proceeds from
loans of $766,936, with $565,928 of that amount derived from related parties and $255,412 from common stock issued for cash.

Off-Balance
Sheet Arrangements

During
the year ended December 31, 2024 and 2023, we did not have, and we do not currently have, any off-balance sheet arrangements,
as defined under applicable SEC rules.

Critical
Accounting Estimates

The
following discussions are based upon our consolidated financial statements, which have been prepared in accordance with accounting
principles generally accepted in the United States.

The
preparation of these consolidated financial statements requires management to make estimates, judgments and assumptions that affect
the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingencies. We continually evaluate
the accounting policies and estimates used to prepare the consolidated financial statements. We base our estimates on historical
experiences and assumptions believed to be reasonable under current facts and circumstances. Actual amounts and results could
differ from these estimates made by management.

See
Note 3 – Summary of Significant Accounting Policies to the accompanying consolidated financial statements for a detailed
description of our significant accounting policies.

Income
Taxes

We
are subject to income taxes in the U.S. Significant judgment is required in determining income tax expense, deferred taxes and
uncertain tax positions. The underlying assumptions are also highly susceptible to change from period to period. In assessing
the realizability of deferred tax assets, management considers whether it is more likely than not that some or all the deferred
tax assets will be realized. The ultimate realization of deferred taxes assets is dependent upon generation of future taxable
income during the period in which those temporary differences become deductible. Management considers the scheduled reversal of
deferred tax liabilities, projected future taxable income, and taxable income in carryback years and tax-planning strategies when
making this assessment. There is currently significant negative evidence which contributes to our recording a valuation allowance
against our deferred tax assets due to cumulative losses since inception.

79 

Although
we believe our assumptions, judgments, and estimates are reasonable, changes in tax laws or our interpretation of tax laws and
the